2. CREDIT CARDS THE POWER OF PLASTIC

3. 2 What are credit cards? Loans--NOT Money! Charge now -- Pay later Becomes a monthly payment obligation What you owe will be greater than what you charged because of interest

4. 3 What is interest? An amount charged by the lender Amount depends on interest rate (APR) and balance May be added monthly, weekly or daily Increases amount owed if balance is not paid in full

5. 4 Know what to expect... Know your terms: –APR Annual Percentage Rate –Grace Period Time you have to pay before they slap on the late fees –Annual Fees A flat fee charged each year for the privilege of owning a card –Minimum payment The smallest amount you can pay and still be in good standing

6. 5 What would you buy?

7. 6 How much will it cost?

8. 7 YOUR SITUATION IS: CREDIT LIMIT $400 CURRENT BALANCE $500 LAST TRANSACTION: $100 Cash Advance All previous charges were purchases You’ll pay the balance in full, but 10 days after the payment due date. (second time in six months!)

9. 8 YOUR AGREEMENT SAYS: YOUR AGREEMENT SAYS: APR: 14.65% On Purchases OTHER APR:Cash Advance 19.99% Late Payment 19.99% (if late twice in any six month period) Cash Advances 3% of advance, but not less than $10.00 Other Fees Late Payment $29.00 Over Credit Limit $29.00

10. 9 YOU PAY: $400 @ 14.65% $404.88 $100 @ 19.99% 101.67 Late Payment Fee 29.00 Cash Advance Fee 10.00 Over-Credit-Limit Fee 29.00 Balance Due$574.55

11. 10 Do’s & Don’ts DO... Limit number of cards Plan a budget Pay your monthly balance in full Keep track of what you bought

12. 11 Do’s & Don’ts DON’T… Miss payments Exceed credit limit Take cash advances Charge more than you can pay back

13. 12 Can credit card debt affect your future? Limit career choices Affect future purchases Reduce your standard of living Stress & Anxiety!!!

14. 13 USE YOUR CREDIT WISELY!!!