Understanding a Credit Card “Take Charge of Your Finances”

What is Credit? Credit- when goods, services or money is received in exchange for a promise to pay a definite sum of money at a future date Credit is derived from the Latin word “credo” meaning “I believe” Why would a person want to use credit?

Obtaining Credit Lender determines whether to grant the borrower credit based on perceived creditworthiness Borrower requests to receive credit from a lender Borrower is in need of credit Lender- person or organization who has the resources to provide the borrower money Creditworthiness- an individual’s ability and willingness to pay the money back Borrower- person or organization that is receiving the money Why would a lender assess a borrower’s creditworthiness before granting credit?

Paying Back Credit Borrower is usually expected to pay interest in addition to the money borrowed If approved, the borrower will receive money from the lender Borrower pays money back Interest - the price of money Why would a lender charge a borrower interest?

Different Forms of Credit How are these forms of credit different? VS. Closed-end Credit Open-end Credit

Closed-end vs. Open-end Credit Closed-end credit Open-end (revolving) credit Definition Purpose of loan (what is purchased) Credit extended in advance A one-time loan May be used for a variety of purposes Specified in application

Closed-end vs. Open-end Credit Closed-end credit Open-end credit Payments Loan Amount Examples Varies- can be paid in one payment or a series of equal or unequal payments Specified number of equal payments Agreed upon during the application process May be increased Mortgage, automobile, education loans Credit cards

What is a Credit Card? Buy Now, Pay Later Pre-approved credit which can be used for the purchase of goods and services now and payment of them later May continue to borrow as long as the credit limit (maximum dollar amount loaned) is not exceeded Credit limit varies based upon the cardholder’s perceived creditworthiness

Annual Percentage Rate (APR) Credit Card Interest Interest is charged each month the balance is not paid in full Rate at which interest is charged is referred to as: Annual Percentage Rate (APR) The cost of credit expressed as a yearly interest rate

Minimum Payments Required to make at least a minimum payment each month Usually only a small percentage (2.5-5%) of the total balance due

~ Total amount of interest paid Minimum Payments To prepare for her first semester of college, Miranda purchased a new computer for $1000 and textbooks for $500, spending a total of $1500 on her credit card charging 15% APR. How much would Miranda pay in interest if she makes the minimum payment? Payment Made ~ Time to pay off card ~ Total amount of interest paid ~ Total amount paid Full Payment Partial Payment Minimum Payment $1500 1 month $0 $1500 $135 1 year $125 $1625 $30 11 years $1413 $2913

Advantages & Disadvantages to Using Credit Cards Convenient payment tool Useful for emergencies Often required to hold a reservation Able to purchase “big ticket” items and spread out payments Protection against fraud Opportunity to establish a positive credit history Online shopping is safer than using a debit card Possibility of receiving bonuses Interest can be costly when a balance is revolved Additional penalty fees may apply Tempting to overspend Risk of identity theft Responsible for lost/stolen cards Applying for multiple accounts in a short period of time can lower your credit score

What is the difference between a credit card and a debit card? What is a Debit Card? Plastic card which looks like a credit card but is electronically connected to the cardholder’s bank account Money is immediately withdrawn from the cardholders checking account What is the difference between a credit card and a debit card?

Creditworthiness Credit card approval depends on borrower’s perceived creditworthiness How a person uses a credit card affects their creditworthiness Creditworthiness is determined by a credit report and/or credit score

Credit History Credit Report Credit Score A record of a consumer’s credit history that includes information about credit card use as well as the use of other types of credit Credit Score A number that summarizes an individual’s credit record and history; a numeric “grade” of a consumer’s financial reliability Credit cards can have a positive or negative impact on an individual’s credit history

Positive Credit Card Use Helps develop positive credit history and credit report Proper credit card use Earn a high credit score A high credit score gives the opportunity to have lower interest rates on loans, the privilege to use different forms of credit, and an easier approval process for future credit

Positive Credit Card Use Examples of positive credit card behaviors: Paying credit card balances in full every month Paying credit card bills on time Applying for only credit cards that are needed Keeping track of all charges by keeping receipts and using a check register Checking the monthly credit card statement for errors

Negative Credit Card Use Develops negative credit history and credit report Improper credit card use Lower credit score Consumers with low credit scores have difficulty getting loans, difficulty renting apartments, pay higher interest rates, pay higher insurance rates, and have difficulty obtaining a job

Negative Credit Card Use Examples of negative credit card behaviors: Making late credit card payments Paying only the minimum payment Exceeding the card’s credit limit (usually triggers a penalty fee) Charging items that can’t be paid off immediately Owning too many credit cards

NO Credit If an individual has not used credit, they will not have any information in their credit report Not having a credit report can cause an individual to be denied credit

Credit Card Offers Called the Schumer Box Credit card issuers are required to disclose the terms and fees of credit cards in an easy to read box format Called the Schumer Box Must direct to the Federal Reserve website (http://www.federalreserve.gov/creditcard/) to obtain more information about credit cards

Annual Percentage Rate (APR) for Purchases Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR for Balance Transfers 15.99% This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99% Penalty APR and When it Applies 28.99% This APR may be applied to your account if you: Make a late payment; Go over your credit limit; Make a payment that is returned; or Do any of the above on another account that you have with us. How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. How to Avoid Paying Interest on Purchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Fees Set-up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. Annual Fee: $20 Account Set-up Fee: $20 (one-time fee) Participation Fee: $12 annually ($1 per month) Additional Card Fee: $5 annually (if applicable) Transaction Fees Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Over-the-limit: $29 Returned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill Credit cards may charge many different types of interest rates Annual Percentage Rate (APR) for Purchases Interest rate paid for purchases Multiple interest rates may be listed - final interest rate may depend on creditworthiness of applicant

Fixed vs. Variable-rate APR Interest Rates and Interest Charges Fixed-rate APR- cannot change during the period of time outlined in a credit card agreement Variable-rate APR- may change depending on other factors (such as economic conditions) Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR for Balance Transfers 15.99% This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99% Penalty APR and When it Applies 28.99% This APR may be applied to your account if you: Make a late payment; Go over your credit limit; Make a payment that is returned; or Do any of the above on another account that you have with us. How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. How to Avoid Paying Interest on Purchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Fees Set-up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. Annual Fee: $20 Account Set-up Fee: $20 (one-time fee) Participation Fee: $12 annually ($1 per month) Additional Card Fee: $5 annually (if applicable) Transaction Fees Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Over-the-limit: $29 Returned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill What is the APR for Purchases for this credit card offer? 14.99% Is this a variable-rate APR or a fixed-rate APR? Variable-rate APR

Interest Rates and Interest Charges Introductory Rate Introductory rate- APR that may be charged after a credit card is opened Will have a different APR (usually higher) after the introductory period ends Not all credit cards have an introductory rate Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR for Balance Transfers 15.99% This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99% Penalty APR and When it Applies 28.99% This APR may be applied to your account if you: Make a late payment; Go over your credit limit; Make a payment that is returned; or Do any of the above on another account that you have with us. How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. How to Avoid Paying Interest on Purchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Fees Set-up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. Annual Fee: $20 Account Set-up Fee: $20 (one-time fee) Participation Fee: $12 annually ($1 per month) Additional Card Fee: $5 annually (if applicable) Transaction Fees Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Over-the-limit: $29 Returned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill What is the introductory rate for this credit card offer? The introductory rate depends on the creditworthiness of the applicant, but it will be 12.99%, 13.99%, or 14.99%

APR for Balance Transfers & Cash Advances Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR for Balance Transfers 15.99% This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99% Penalty APR and When it Applies 28.99% This APR may be applied to your account if you: Make a late payment; Go over your credit limit; Make a payment that is returned; or Do any of the above on another account that you have with us. How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. How to Avoid Paying Interest on Purchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Fees Set-up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. Annual Fee: $20 Account Set-up Fee: $20 (one-time fee) Participation Fee: $12 annually ($1 per month) Additional Card Fee: $5 annually (if applicable) Transaction Fees Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Over-the-limit: $29 Returned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill APR for Balance Transfers & Cash Advances Balance transfer - act of transferring debt from one credit card to another Cash advance includes withdrawing cash from an ATM using a credit card Balance transfer and cash advance fees may also apply (even if the APR is 0%)

Interest Rates and Interest Charges Penalty APR and When it Applies Discloses the penalty APR and the penalty terms that trigger it to take effect Penalty APR - interest rate charged on new transactions if the penalty terms in the contract are triggered Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR for Balance Transfers 15.99% This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99% Penalty APR and When it Applies 28.99% This APR may be applied to your account if you: Make a late payment; Go over your credit limit; Make a payment that is returned; or Do any of the above on another account that you have with us. How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. How to Avoid Paying Interest on Purchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Fees Set-up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. Annual Fee: $20 Account Set-up Fee: $20 (one-time fee) Participation Fee: $12 annually ($1 per month) Additional Card Fee: $5 annually (if applicable) Transaction Fees Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Over-the-limit: $29 Returned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill What is the Penalty APR for this credit card offer? 28.99%

Interest Rates and Interest Charges Minimum Interest Charge Annual Percentage Rate (APR) for Purchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR for Balance Transfers 15.99% This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99% Penalty APR and When it Applies 28.99% This APR may be applied to your account if you: Make a late payment; Go over your credit limit; Make a payment that is returned; or Do any of the above on another account that you have with us. How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. How to Avoid Paying Interest on Purchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Fees Set-up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. Annual Fee: $20 Account Set-up Fee: $20 (one-time fee) Participation Fee: $12 annually ($1 per month) Additional Card Fee: $5 annually (if applicable) Transaction Fees Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Over-the-limit: $29 Returned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill How To Avoid Paying Interest on Purchases Explains how you can avoid interest charges by paying credit card bills in full every month Minimum Interest Charge Typically range from $0.50 to $2 per month

Interest Rates and Interest Charges Set-up and Maintenance Fees Credit cards may charge many different types of fees Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR for Balance Transfers 15.99% This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99% Penalty APR and When it Applies 28.99% This APR may be applied to your account if you: Make a late payment; Go over your credit limit; Make a payment that is returned; or Do any of the above on another account that you have with us. How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. How to Avoid Paying Interest on Purchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Fees Set-up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. Annual Fee: $20 Account Set-up Fee: $20 (one-time fee) Participation Fee: $12 annually ($1 per month) Additional Card Fee: $5 annually (if applicable) Transaction Fees Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Over-the-limit: $29 Returned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill Set-up and Maintenance Fees Any set-up and maintenance fees for the card Annual fee- a yearly fee that may be charged for having a credit card What is the annual fee for this credit card? $20

Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR for Balance Transfers 15.99% This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99% Penalty APR and When it Applies 28.99% This APR may be applied to your account if you: Make a late payment; Go over your credit limit; Make a payment that is returned; or Do any of the above on another account that you have with us. How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. How to Avoid Paying Interest on Purchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Fees Set-up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. Annual Fee: $20 Account Set-up Fee: $20 (one-time fee) Participation Fee: $12 annually ($1 per month) Additional Card Fee: $5 annually (if applicable) Transaction Fees Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Over-the-limit: $29 Returned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill Transaction Fees Discloses any transaction fees for the card Balance transfer fees Cash advance fees May be charged in addition to APR

Interest Rates and Interest Charges Penalty Fees Discloses the penalty fees for the card (in addition to Penalty APR) Late-payment- charged when a cardholder does not make the minimum monthly payment by the due date Over-the-limit-charged if the account balance goes over the set credit limit Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR for Balance Transfers 15.99% This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99% Penalty APR and When it Applies 28.99% This APR may be applied to your account if you: Make a late payment; Go over your credit limit; Make a payment that is returned; or Do any of the above on another account that you have with us. How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. How to Avoid Paying Interest on Purchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Fees Set-up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. Annual Fee: $20 Account Set-up Fee: $20 (one-time fee) Participation Fee: $12 annually ($1 per month) Additional Card Fee: $5 annually (if applicable) Transaction Fees Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Over-the-limit: $29 Returned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill

How we calculate your balance Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR for Balance Transfers 15.99% This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99% Penalty APR and When it Applies 28.99% This APR may be applied to your account if you: Make a late payment; Go over your credit limit; Make a payment that is returned; or Do any of the above on another account that you have with us. How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. How to Avoid Paying Interest on Purchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Fees Set-up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. Annual Fee: $20 Account Set-up Fee: $20 (one-time fee) Participation Fee: $12 annually ($1 per month) Additional Card Fee: $5 annually (if applicable) Transaction Fees Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Over-the-limit: $29 Returned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill How we calculate your balance Credit card companies can use one of several methods to calculate the outstanding balance on a credit card What method is used to calculate the balance on this card? Average daily balance (including new purchases)

Loss of Introductory APR If the card has an introductory rate, this area will list how the lower introductory rate can be lost Interest Rates and Interest Charges Annual Percentage Rate (APR) for Purchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR for Balance Transfers 15.99% This APR will vary with the market based on the Prime Rate APR for Cash Advances 21.99% Penalty APR and When it Applies 28.99% This APR may be applied to your account if you: Make a late payment; Go over your credit limit; Make a payment that is returned; or Do any of the above on another account that you have with us. How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. How to Avoid Paying Interest on Purchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum Interest Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card Tips from the Federal Reserve Board To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Fees Set-up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. Annual Fee: $20 Account Set-up Fee: $20 (one-time fee) Participation Fee: $12 annually ($1 per month) Additional Card Fee: $5 annually (if applicable) Transaction Fees Balance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Transaction: 2% of each transaction in U.S. dollars Penalty Fees Late Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Over-the-limit: $29 Returned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill How can the introductory APR be lost on this card? If the cardholder is more than 60 days late in paying the bill What APR will the cardholder be charged if the introductory rate is lost? The Penalty APR of 28.99%

Credit Card Benefits Make sure to know all terms and conditions Cash Rebates Warranties for items purchased Frequent Flyer Miles Travel accident insurance Other benefits? Make sure to know all terms and conditions May charge fees or higher interest rates

How do I obtain a credit card? Comparison shop for a credit card Compare credit card offers and determine which card to apply for Complete a credit application A form requesting information about a person’s ability to repay Lenders conduct a credit investigation A comparison of information on credit application to information on a credit report Approval? Applicant may or may not be approved (depends on creditworthiness) Credit card companies send pre-approved credit card applications in the mail when the individual has passed their initial credit check