1. Advantages and Disadvantages of Credit

2. Do now
Capital one Bank frequently advertises their credit cards on TV.
What are these commercials promoting?
How do these companies make money?

3. Focus Questions What are the advantages of using credit?
What are the disadvantages of using credit?
What can you do to avoid credit fraud or identity theft?

4. Advantages of Credit Improves Standard of Living
Convenience and Safety
Help in Emergencies
Help in Recordkeeping
Forced Savings

5. Disadvantages of Credit
Interest Charges and Fees
grace period a period of time, usually twenty to thirty days, when interest is not charged on current credit card purchases
universal default a provision in a credit card contract that allows the bank to charge a higher interest rate if a customer's credit score goes down

6. Possible reasons for your rate to go up
late payments on car, utilities etc.
going over your limit
carrying too much debt
too many credit inquiries
new car loan

7. Disadvantages of Credit
Increased impulse buying
Financial Problems
Bankruptcy is a legal process in which a debtor (a person who owes money) declares the inability to repay debts over a reasonable period of time

8. Credit Fraud and Identity Theft
Credit fraud is the theft and illegal use of someone else's credit information. Identity theft the act of gathering enough information about a person to assume his or her identity, and then using that identity to commit fraud or other crimes.

9. Safeguarding Your Information
Don't give out your Social Security number
Do not deal with a company or person you don't know
Remove mail as soon as possible
Examine all bills
Use a shredder
Be careful when using an ATM
Keep tabs on your wallet
Keep receipts and check them against your statement

10. Monitoring Your Credit History
Obtain a credit report and review it for:
inquiries from companies you did not contact
accounts you did not open
debts on your accounts that you cannot explain
correct personal information (name, SS#, address, employers' names)

11. what to do if you discover fraudulent or inaccurate information
Contact both the credit bureau and the information provider in writing

12. Reporting Fraud and Identity Theft
Contact one of the three credit bureaus
Get a fraud alert placed on your credit file
Place a security freeze (prevents access to your credit report)
Contact the police
Report the crime to the FTC

13. Notify Your Creditors New accounts that you did not open
Credit cards, debit cards, that were stolen or used fraudulently