1. Credit Basics

2. Some old stats 83% of college students have at least one credit card 45% of college students are in credit card debt –Average debt over $3000 The average household with debt carries approximately $10-12,000 and has 9 credit cards Americans shelled out more than $24 BILLION dollars in credit card fees in 2004

3. Cost of Credit APR - Annual Percentage Rate –Amount it costs you a year to sue credit, expressed as a percentage rate Annual Fee –Usually used by credit card companies Finance Charge –Actual dollar cost of using credit Origination Fee –A charge for setting up a loan

4. Credit Cards APR Annual Fee Grace Period Minimum payment Credit limit

5. Installment Loans Make payments in a regular basis usually for large purchases. –Car –Appliances –Interest rates usually lower than credit cards

6. Student Loans Usually carry lower interest rates Usually allow you to defer payments until after you graduate

7. Mortgages Home loan Usually 15-30 years Large amount borrowed

8. Credit Report A record of your financial transactions –Loans you have applied for –Loan amounts you have received –Whether you pay your bills on time –For the past 7-10 years

9. Credit Reporting Agencies Equifax Experian Trans Union

10. C’s of Credit Capacity - ability to repay Character - paying on time Capital - have items of value

11. Bankruptcy Chapter 7 - erases most of debt –Unemployed/very low income –Counseling Chapter 13 - pay back debt but with more time –Court oversees payment plan WARNING - stays on credit report for 10 years and it becomes very difficult to get credit