1. Credit Cards Adult Living

2. Advantages of using credit It’s convenient. You don’t have to carry large amounts of cash and you don’t have to go through the process of writing a check You can use goods and services before or as you pay for them. You can buy costly items that you might not be able to buy with the amount of cash available. It usually simplifies exchanges, returns, and telephone/ internet orders.

3. Disadvantages of using credit You reduce your future income. Using credit usually costs money. The more credit you use and the more time you take to repay, the more you must pay in finance charges. You may be tempted to overspend because of impulse buying. Failure to pay promptly could result in a poor credit rating.

4. Vocabulary Credit Score/ record- a record kept of all your credit habits. Compiled into an overall score, given by 3 companies, effects future credit. Fees- annual fee, balance transfer fee, cash advance fee, minimum payment fee Interest- the money paid to borrow money

5. Tips for using Credit 1.Know your rights. ($50 by law-stolen) 2.Avoid finance charges by paying off balances. 3.Know your credit limit (ask for a set amount) 4.Keep accurate and complete records of your credit purchases.

6. More credit card tips… 5.Protect your credit rating by paying promptly. 6.Interest rates for credit vary. Shop around for the best deal. 7.Notify creditors without delay if your credit card is lost or stolen or if you can not pay as agreed.

7. How to build a GOOD credit history Establish a steady work record. Pay all bill promptly Open a checking account and don’t bounce checks. Open a savings account and make regular deposits Apply for a local store credit card and make regular monthly payments. Apply for a small loan using your savings account as collateral. Get a co-signer on a loan and pay back the loan as agreed.

8. Types of Credit Close-ended credit: a one time purchase of something, when you make the last payment, you own it. Examples: car, house, furniture Open-ended credit (revolving): a credit card at a store, gas station, major credit card Examples: visa, MasterCard, stores

9. Where do you get credit? Banks-loans, credit cards Stores- credit cards, financing plans Online- credit card offers Finance store- check into cash, payday loans (very high interest)

10. How is interest calculated? APR- annual percentage rate APR= 2 (M) (F) P(N+1) M= # of payments in a year F= finance charge P= amount financed (borrowed) N= total number of payments