1. Credit Cards Dylan Donahue

2. What is Credit Credit means simply that someone to lend you money after you promise to pay it back with interest. Interest is the extra amount that you pay to borrow someone’s money -NEFE

3. How credit cards work work Credit cards are given by a institution such as a bank, store, or credit union allowing you to borrow money with the intent that you pay it back with interest if the total amount is not paid for by the due date each month. There is a credit limit on an individual card. When you buy something with the card credit, the credit is used up but when you pay it back each month it is made available again. They have a minimum payment that must be paid by a certain date to avoid penalties, but you must still interest on the amount not paid back. There is also a significant late fee (up to $40 or more) if the payment is not received by the due date. Multiple late payments will result in the credit card company reporting you to a credit bureau which in turn will hurt your credit score. You have to be 18 years of age to apply for a credit card.

4. Types of Credit Cards Standard credit cards Premium credit cards Charge cards Limited purpose cards Secured credit cards Prepaid credit cards Business credit cards

5. Standard Credit Cards The most basic of credit card comes with standard features and is a good place to start out when you are new to credit cards. There is much variation on the definition of standard features, but it seems that all include: A certain number of interest free days for payment Disclosed interest rates on purchases and cash advances Disclosed late fee amounts Disclosed balance transfer interest rate and charges http://www.creditcards.com.au/compare/nab/velocity-credit-card/ Standard credit card features are just what you’d think. They are usually a small line of credit on a card that you can just pay back little by little and there are no bells and whistles such as reward points or cash back http://credit.about.com/od/creditcardbasics/tp/credit-card-types.htm http://credit.about.com/od/creditcardbasics/tp/credit-card-types.htm - Through slide 11

6. Premium Credit Cards These cards come with a name such as gold or platinum and have specific incentives for using that particular card. The incentives include cash back, travel points, and reward points. They have higher fees and a minimum income and you also need a high enough credit score.

7. Charge cards Charge Cards don’t have a limit that you can buy but the balance must be completely paid for at the end of each month. Late payments will result in penalties such as charge restrictions fines and even card cancelation but even if the card is cancelled you still have to pay back your debt..“It’s not a credit card or a debit card. If you’ve never had a charge card, you may wonder how it compares to the plastic you already carry. Charge cards - primarily issued by American Express - require cardholders to pay off balances each month. There are no interest rates or hard-and-fast spending limits.” American Express Check out the website for much more detail: http://www.boston.com/business/personalfinance/articles/2010/01/23/what s_the_difference_between_a_charge_card_and_a_credit_card

8. Limited Purpose Cards Credit cards that can only be used at specific locations. Such as a Macy’s card or a specific gas station card.

9. Secured Credit Cards These are an option for people with no or poor credit history. They require a security deposit on the card that is equal to the credit limit.

10. Prepaid Credit Cards This type of card requires that the owner of the card deposit a set amount of money on the card and that money can be withdrawn. They are similar to debit cards but aren’t tied to a checking account.

11. Business Credit Cards These are designed specifically to be used in businesses and offer special perks for your business. They are offered in standard or charge cards.

12. Disclosure boxes This is information given to the applicant of the card by the institution. These are required by federal law. (http://www.financialinstitutionlawblog.com/schumer-box- disclosure-not-clear-and-conspicuous-as-a-matter-of-law-schumer- box-disclosure-not-clear-and-conspicuous-as-a-matter-of-law.html) http://www.pueblo.gsa.gov/cic_text/money/c hoosecard/cards.htm

13. Information in Disclosure Boxes Annual percentage rate (APR) for purchases 2.9% until 11/1/06 after that, 14.9% Other APRs Cash-advance APR: 15.9% Balance-Transfer APR: 15.9% Penalty rate: 23.9% See explanation below.* Variable-rate information Your APR for purchase transactions may vary. The rate is determined monthly by adding 5.9% to the Prime Rate.** Grace period for repayment of balances for purchases 25 days on average Method of computing the balance for purchases Average daily balance (excluding new purchases) Annual fees None Minimum finance charge $.50 Transaction fee for cash advances: 3% of the amount advanced Balance-transfer fee: 3% of the amount transferred Late-payment fee: $25 Over-the-credit-limit fee: $25 * Explanation of penalty. If your payment arrives more than ten days late two times within a six-month period, the penalty rate will apply. ** The Prime Rate used to determine your APR is the rate published in the Wall Street Journal on the 10th day of the prior month. http://www.pueblo.gsa.gov/cic_text/money/ch oosecard/cards.htm

14. Important Terms to Know APR (Annual Percentage Rate) – The percentage you will be charged in interest if you carry a balance from month to month. Credit Line – Or credit limit is the maximum amount of money you can charge to your card. Schumer Box – The disclosure box where terms and conditions are explained. This is required by law. Grace Period – Amount of time you have to pay balance without incurring interest. http://www.creditcards.com/credit-card-news/credit- card-glossary-terms-first-credit-card.php

15. How to Find the Best Deal In order to find the best credit card for you a lot of research is necessary. There are lots of seemingly good deals out there and to sort through them you have to call different credit cards and research on line and look at all the details. Having a credit card is no joke they can very much help a person in achieving their financial goals but also they can leave you with a lot of debt if you are not careful they can leave you with lots and lots of debt. Overall credit cards only behoove those who are responsible individuals who only make purchases they intend to pay back within a reasonable amount of time. http://www.pueblo.gsa.gov/cic_text/money/choosecard/ca rds.htm

16. Questions What is credit? How old do you have to be to apply for a credit card? What does APR stand for? What’s the importance of a disclosure box? Some credit card rewards?

17. ANSWERS Credit means simply that someone to lend you money after you promise to pay it back with interest 18 years old APR stands for annual percentage rate Disclosure boxes tell you the APR and lots of other necessary information about your credit card. Some credit rewards are cash back airline miles etc.