Hi Nice to meet you Some questions What does it mean to take personal responsibility for something Give an example of a situation where you have taken responsibility for making sure something got done ID: 639101
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Slide1
Credit Cards
An Introduction
“Hi! Nice to meet you!”Slide2
Some questions
What does it mean to take “personal responsibility” for something? Give an example of a situation where you have taken responsibility for making sure something got done.
Have you ever borrowed money from someone? What agreement did you make with them about paying the money back? Did you?
Have you ever given a loan to someone? What was the agreement? Did you get it in writing?
Why might someone want to make a purchase with a credit card instead of buying it with cash?Slide3
Credit
Ability of a
person
or
business
to borrow money from a lender with the promise to pay it back
Earning credit requires
trustSlide4
Credit History
Determines whether you can borrow
money
from a
bank
(a loan) for a house, car, etc.
Shows whether you are responsible in making payments
overtime
Follows you your whole life – you want
good
credit historySlide5
How to get a credit card…Slide6
You can apply for a credit card when you’re
18
years old
1) The lender will first want to know what your
income
is
2) They’ll want to know your
history of paying bills
ontime
.
If they approve of all of these things, you will get a credit card!Slide7
Interest
The fee lenders charge for lending you money
Expressed as
Annual Percentage Rate (APR)
which is the percentage interest charged on the loan
over a year
If you pay off your loan every month, you
do not
have to pay
interest
You usually want to shop for a credit card with a
low interest rateSlide8
Credit Card Limit
The max amount you can charge to your credit card (set by the lender)Slide9
Annual Fee
Some credit cards charge an annual fee and are usually associated with some sort of
bonus
(
eg
. travel points, rewards, etc.)
If you don’t pay the annual fee on time you will be charged a
late feeSlide10
Bad Credit
Happens when you don’t
make a payment
, or you make a
late payment
May be charged a
late fee
or a higher
interest rate
as a penaltySlide11
Bottom Line…
IT’S IMPORTANT TO KNOW THE INS AND OUTS OF YOUR CREDIT CARD!!!Slide12
Ex. 1
You
charge $100 on a credit card that has a limit of $300. The card has an annual interest rate of 18%. Estimate how long it will take you to pay off the total charge if you pay $20 a month. Slide13
Ex.2
At
18% a year, what will the interest be on the unpaid $80 balance at the end of the first month? Slide14
Ex. 3
On
the $100 charge, how much will your outstanding balance be at the end of the first month, if you only make a payment of $5? Slide15
Ex. 4
How are balances determined?