Costly Credit Cards - Credit on Campus - Build Credit at a Young Age - Smart Uses for Credit Cards - Improving Your Credit History - Cutting Credit Card Rates - ATM Rip-Offs

Credit and Credit Cards Credit Cards – 2014 – 200 million customers held 1 or more credit cards(average of 3.75 pp) Total number of credit cards in use – 1.9 Billion U.S. household consumer debt profile: Average credit card debt: $15,611 Average mortgage debt: $155,192 Average student loan debt: $32,264

Credit and Credit Cards In total, American consumers owe: $11.74 trillion in debt (up 3.3%) $882.6 billion in credit card debt $8.14 trillion in mortgages $1.13 trillion in student loans (up 8%) 2014 – 910,090 individuals filed for bankruptcy Guinness Book of World Records – 1 person with 1,497 Credit Cards (2005)

Credit and Credit Cards Use of Credit Cards – Advantages Buy and enjoy expensive items while still paying for them Convenience  Traveling  Mail or Internet Financial Emergencies Student loans Purchase of vehicles and homes

Credit and Credit Cards Disadvantages – Increase in cost due to interest and fees Overspending False sense of security Risk – Poor Credit Rating Future earnings are “earmarked” Frenzies Poor purchases – goods not needed Predatory Lending Living beyond ones means or income

Credit and Credit Cards Advertising or Promotions – Hidden messages False advertising Loans – Are they Equal? APR Credit Limit Finance Charge Minimum payment and over limit fees

Credit and Credit Cards Credit Worthiness – 3C’s Collateral Character Capacity

Credit and Credit Cards Important Terms – Annual Percentage Rate (APR) Credit Score & Credit Rating Due Date Finance Charge Grace Period Minimum Payment Cost/Benefit Analysis

Credit Reports – Credit Rating Credit Reporting Agencies (CRA’s) – Important role in determining who receives credit and how much is obtained Gather and sell personal credit information  Payment tendencies  Amount of debt  Available credit  Loans, tax liens, judgments, bankruptcy  Employment status and salary history  Residencies and aliases

Credit Reports – Credit Rating Credit Reporting Agencies (CRA’s) – Equifax Experian TransUnion

Credit Reports – Credit Rating Credit Reports Matter – Information can affect one’s present and future financial life Poor credit ratings prevent people from obtaining good credit rates or any credit at all Ways to Establish Credit – Open a savings or checking account Bank Loan Credit Card

Credit Reports – Credit Rating Ways to Establish Credit – Small credit purchase Cell phone or Internet in your name Membership to a Credit Union Questions to Consider – What is a credit report and what kind of information does it contain? Who maintains, updates, and uses this information? Why is a good credit report important?