Plastic Money All Cards Are Not The Same!

A New Class: The Asset Poor Asset Poverty Rates by Race in the United States African AmericanHispanicNative AmericanAsianWhite 43.2%39.0%34.5%23.1%16.6% An asset-poor household is one in which a sudden halt in income would have serious consequences immediately. Asset poverty is a measure of whether a household can support itself using savings or other available assets for 12 weeks at a poverty-level income.

Average Credit Card Debt by Age, Income and Race/Ethnicity

Types of Expenses Contributing to Credit Card Debt

Debit Cards: The Pay Now Card  Benefits  No bulky checkbook or large sums of cash.  Widely accepted.  Fast, easy payment process.  Easier qualification.  Disadvantages  Mistaken for credit cards and used in place sometimes.  No grace period.  Some have monthly or pre-transaction fees.  Many now have zero-liability for unauthorized purchases.  Dispute concerning purchases usually handled by consumer.

Using Your Debit Cards: Same as writing a check. If you lose your debit card or the PIN is stolen, it is like losing cash. No protection from fraud. Usable at ATM or a point-of-sale (POS) terminal with your personal identification number, or PIN. Usable at stores and restaurants that accept credit cards, without providing your PIN. You will be asked to sign a receipt.

If your Debit Card is Lost or Stolen: –Alert your bank as soon as possible. –The longer you wait, the more money you might be responsible for if an unauthorized person uses your card to buy things.

Credit Cards The Cornerstone of the U.S. Economy

How Credit Card Companies Make Their Money: “Let Me Count the Ways!” 1.Application Fee Zero - $ Annual Fee Zero - $ A.P.R.Zero – 19.95% 4.Cash advance for APR 19.95% minimum 5.Balance transfer 19.95% 6.Processing Fee Zero – 34% 7.Late Fees$ Over the Limit Fee$ Foreign Currency transaction3% 10.Cash Advances (NYCE, Plus)Greater of $3 or 3% of advanced cash 11.Minimum Finance Change$ Institution Charge % of bill and $.50 processing fee

The New and Improved Schumer Box

Do I Even Need A Credit Card? Advantages:  Able to buy needed items now  Don’t have to carry cash  Creates a record of purchases in case of identity theft (SS #)  More convenient than writing checks  Consolidates bills into one payment  Establishes credit record and score  If the item is faulty or defective, card company will fight the return  If your card is stolen, you are only responsible for $50.00 (caveat emptor) Disadvantages:  Interest (higher cost of items)  May require additional fees  Financial difficulties may arise if one loses track of how much has been spent each month  Increased impulse buying may occur  Only spend what is in my debit account, keeps me on budget.  If I lose my debit card, crooks can only access what cash is in account.  Two-cycling billing calculates interest based on two billing cycles.  Know, if there is a grace period.

Pre-Paid Money Cards

Key Features of Prepaid Cards  Can pay household bills with the card.  Safer than cash and most deposits are FDIC insured.  If networked branded (VISA, Plus, NYCE logo), accepted wherever these accounts are accepted.  No credit check or ChexSystems verification to open.  Most allow for direct deposit and transferring of funds  Can use ATM’s for withdrawals  Cash back with purchases  Can be less expensive than check cashing, money orders, or checking account fees  Most cannot be overdrawn, and fees are easier to figure out.  Account updates are accessible online, by phone, or texting.  Funds loaded are immediately available.

Disadvantages of Pre-paid Cards  Mistaken for credit cards and used in place sometimes.  Do not pay interest on fund balance.  Many now have zero-liability for unauthorized purchases.  Dispute concerning purchases usually handled by consumer.  Using an ATM, may cost you two fees (ATM & bank).  Few cards report to bill paying to credit agencies so your credit score will not be improved.  Fee structures vary widely, and some fees being excessive.  There is no one best card, you need to shop around and compare to avoid hidden fees.

 Activation fee (Can be waived, but $5)  Monthly fees (can depend on account $6)  ATM use fee, if not in network ($30)  International use fee (withdrawals and conversion)  Inactivity fees (for $2 - $3 per month)  Overdraft or shortage fees - $3)  Small dollar loan fees (varies on rate)  Teller cash advance fee($2.50)  Balance inquiry and declined withdrawal fees ($.50)  Car replacement fee for lost card ($6.00)  Reload fee, if done at retail location ($3 - $5)  Expedited card delivery ($20)  Second card fee ($5) Common Fees for Prepaid Cards