Project Credit Smarts

The Office of Consumer Affairs and Business Regulation The Office of Consumer Affairs and Business Regulation empowers Massachusetts consumers through education and outreach and maintains a fair and competitive marketplace. Agencies: –Division of Banks (DOB) –Division of Insurance (DOI) –Division of Professional Licensure (DPL) –Division of Standards (DOS) –Department of Telecommunications and Cable (DTC) What is Consumer Affairs? 2

What is Project Credit Smarts? Educational campaign; knowledge sharing Topics include: –Bank accounts and debit cards –Credit cards –Credit Reports –Student loans –Protecting against identity theft –Maintaining good financial habits 3

Banking 4

Bank Accounts & Debit Cards Having a bank account Choosing a bank account Tips for debit card use Debit card protections 5

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Credit Cards Good reasons to have a credit card Choosing a credit card Tips on using a credit card 7

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Minimum Payments Cost $$$ 9 ItemPrice Interest Rate (APR) Years to Pay Off Total Interest Paid Total Cost TV $50018% 8 $439 $939 Computer$1,00018%19$1,899$2,899 Furniture$2,50018%34$6,281$8,781 Note: All payments are the monthly minimum of two percent of the outstanding balance or $10, whichever is greater. Years are rounded to the nearest whole year. Information from the FDIC.

10 Paying More Pays Starting Balance Interest Rate (APR) Monthly Payment Years to Pay Off Total Interest Paid Total Cost $5,00018%minimum46$13,926$18,926 $5,00018%$1008 $4,311 $9,311 $5,00018%$2502 $986 $5,986 Note: The minimum payment is assumed to be two percent of the outstanding balance or $10, whichever is greater. Years are rounded to the nearest whole year. Information from the FDIC

Credit Cards What if you cant pay? Late fees Penalty rates Negatively affects credit history 11

Building Credit: Credit Card Alternatives In-store credit cards Piggybacking Secured cards Paying other bills on time 12

Credit Reports 13

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YOU ARE ENTITLED TO A FREE CREDIT REPORT or call (877)

Credit Reporting Agencies The three major credit reporting agencies are: EquifaxExperianTransUnion

Check Your Credit Report Background info Account accuracy Negative info Dispute errors Written explanatory statement 17

What is a credit score? NOT free Credit worthiness How scores are calculated What your scores mean 18

How do I improve my credit? Dont add more debt Make timely payments Maintain low balance (30% of credit limit) Careful about new lines of credit Dispute old negative information Budget Save money, if possible 19

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Student Loans What You Should Know Student Loan Process Federal versus Private Repayment Delinquency and Default (not Bankruptcy) Counseling and Information 21

Federal Student LoansPrivate Student Loans Repayment in school? No – deferredMaybe – depends Interest RateFixedVariable Subsidized?Some undergrads may qualifyNo Credit required? No, except for Direct PLUS (can help you build credit) Yes, credit required before you can take out the loan Cosigner?Mostly, noMostly, yes Tax benefitsInterest payments may be tax deductible Interest payments are probably not tax deductible ConsolidationDirect Loan ConsolidationNo Direct Loan Consolidation Deferment or Forbearance Temporary allowancesMaybe, depends Repayment Options Several optionsMaybe, depends Loan Forgiveness Public loan forgivenessMaybe, but unlikely Free Help800-4-FED-AIDGo to cfpb.gov student loan ombudsman 22

Repayment Monthly payment Types of repayment (federal loans) –Standard –Extended –Graduated –Income-Contingent –Income-Sensitive –Income-Based Consolidation Forgiveness Postponement 23

Delinquency and Default Delinquency –Grace period –Begins the day after you miss a payment –Creditor must send you notice of delinquency Default –Usually the entire loan comes due –Ways to get out of default Beware Bankruptcy 24

More Information & Counseling Contacts Government –Consumer Financial Protection Bureau: –U.S. Department of Education: www2.ed.gov/students/landing.jhtml –Federal Student Aid: studentaid.ed.gov –National Student Loan Data System for information about your individual loans: nslds.ed.gov –Information about loan consolidation: loanconsolidation.ed.gov –Glossary of Student Loan terms: studentaid.ed.gov/glossary Non-profit –American Student Assistance: asa.org 25

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Safeguarding your credit Dont lend your cards Contact your creditor fast about lost or stolen cards Notify any one of the credit reporting agencies Junk Mail: Dangerous? YOU CAN OPT OUT OF CREDIT CARD MAILINGS! Call (888) 5-OPTOUT / (888) or go online at

How to spot identity theft How to prevent identity theft Fraud Alert Protect Yourself 28

Think youre a victim of ID theft? Toll Free: (877) IDTHEFT ( ) TTD: (202) or visit: 29

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Overwhelmed by your finances? Act fast Contact your creditors Ask for professional help Keep track of finances 31

Who can help Boston Branch 31 Milk St., Ste. 515 Boston, MA Randolph Branch 247 N. Main St., Ste. 200 Randolph, MA Worcester Branch 340 Main St., Ste. 813 Worcester, MA Lowell Branch 40 Central St. Lowell, MA Woburn Branch 800 W. Cummings Park, Ste Woburn, MA Money Management Intl

Who can help Federal Trade Commission 600 Pennsylvania Avenue, NW Washington, DC (202) FTC Article on how to select a credit counselor 33

Our Partners Federal Trade Commission Northeast Region Federal Deposit Insurance Corporation 34

THANK YOU! For more information, log onto Or call the Consumer Hotline at (617) / (888)