Advanced Level The Essentials to Take Charge of Your Finances What is Credit Why would a person want to use credit Brainstorm Credit when goods services or money is received in exchange for a promise to pay a definite sum of money at a future date ID: 724662
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Slide1
Understanding Your Credit Card Essentials Advanced Level
The Essentials to Take Charge of Your FinancesSlide2
What is Credit?
Why would a person want to use credit?
Brainstorm!
Credit-
when goods, services or money is received in exchange for a promise to pay a definite sum of money at a future date
Credit is derived from the Latin word “credo” meaning “I believe” Slide3
Obtaining Credit
Borrower
(person or organization that is receiving the money) is in need of credit
Borrower requests to receive credit from a
lender
(person or organization who has the resources to provide the borrower money)
Lender determines whether to grant the borrower credit based on the borrower’s
perceived
creditworthiness
(an individuals ability and willingness to pay the money back)
Why would a lender assess a borrower’s creditworthiness before granting credit?Slide4
Paying Back Credit
If approved for credit, the borrower will receive money from the lender
Why would a lender charge a borrower interest?
Borrower is usually expected to pay
interest
(the price of money) in addition to the money borrowed
Depending on the type of credit, money is paid back in a series of equal or unequal paymentsSlide5
What is a Credit Card?
Pre-approved credit which can be used for the purchase of goods and services now and payment of them later
A credit cards credit limit varies based upon the cardholder’s perceived creditworthiness
Cardholders may continue to borrow as long as the
credit limit (
maximum dollar amount loaned) is not exceeded Slide6
Credit Card Interest
Interest is charged each month the balance is not paid in full
The cost of credit expressed as
a yearly interest rate
Rate at which interest is charged is referred to as:
Annual Percentage Rate (APR)Slide7
Minimum PaymentsRequired to make at least a minimum payment each monthUsually only a small percentage (2.5-5%) of the total balance due
Cardholders who only make the minimum payment:Make slow progress paying off card balancePay substantially more than what was initially charged to the cardSlide8
Minimum Payments
Amount charged to credit card in one purchase
APR
Minimum payment
Time to pay off the credit card
Total amount paid in interest
Total amount paid
$2,00018%
$50.0062 months
$1,077.25$3,077.25$50012%$25.0023 months
$60.67$560.67
What are the advantages and disadvantages of using a credit card?
Brainstorm!Slide9
Advantages & Disadvantages to using Credit Cards
Convenient payment tool
Useful for emergencies
Often required to hold a reservation
Able to purchase “big ticket” items and spread out payments
Protection against fraud
Opportunity to establish a positive credit history
Online shopping is safer than using a debit cardPossibility of receiving bonusesInterest can be costly when a balance is revolvedAdditional penalty fees may applyTempting to overspend
Risk of identity theftResponsible for lost/stolen cardsApplying for multiple accounts in a short period of time can lower your credit scoreSlide10
Debit CardsWhat is a debit card?A plastic card which looks like a credit card, but is electronically connected to the cardholder’s bank account
Money is immediately withdrawn from the cardholders checking account
What is the difference between a credit card and a debit card?Slide11
Creditworthiness
Credit card approval depends on the borrower’s perceived creditworthiness according to the lender
Lenders assess an individual’s creditworthiness based upon their credit report and/or credit score
How a person uses a credit card
affects
their creditworthiness
CreditworthinessSlide12
Credit History
Credit Report
A record of a consumer’s credit history that includes information about credit card use as well as the use of other types of credit, such as auto loans, student loans and mortgage loans
A number that summarizes an individual’s credit record and history. It is a numeric “grade” of a consumer’s financial reliability
Credit
Score
Credit cards can have a positive or negative impact on an individuals credit historySlide13
Positive Credit Card Use
Proper credit card use
Helps develop positive credit history and credit report
Earn a high credit score
A high credit score gives the consumer the opportunity to have lower interest rates on loans, the privilege to use different forms of credit, and an easier approval process for future creditSlide14
Positive Credit Card Use
Examples of positive credit card behaviors:Paying credit card balances in full every monthPaying credit card bills on time Applying for only credit cards that are needed
Keeping track of all charges by keeping receipts and using a check register
Checking the monthly credit card statement for errorsSlide15
Negative Credit
Card Use
Consumers with low credit scores have difficulty getting loans, difficulty renting apartments, pay higher interest rates, pay higher insurance rates, and have difficulty obtaining a job
Improper credit card use
Develops negative credit history and credit report
Lower credit scoreSlide16
Negative CreditCard use
Examples of negative credit card behaviors:Making late credit card paymentsPaying only the minimum paymentExceeding the card’s credit limit (usually triggers a penalty fee)
Charging items that can’t be paid off immediately
Owning too many credit cardsSlide17
NO CreditIf an individual has not used credit, they will not have any information in their credit report
Not having a credit report can cause an individual to be denied creditSlide18
Credit Card Offers
Credit card issuers are required to disclose the terms and fees of credit cards in an easy to read box format
This is called the
Schumer box
Must direct consumers to the Federal Reserve website (
http://www.federalreserve.gov/creditcard/
)
to obtain more information about credit cards, including the following sample credit card offerSlide19
Interest Rates and Interest Charges
Annual Percentage Rate (APR) for Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate.
APR for Balance Transfers
15.99%
This APR will vary with the market based on the Prime Rate
APR for Cash Advances21.99%This APR will vary with the market based on the Prime Rate
Penalty APR and When it Applies
28.99%This APR may be applied to your account if you:Make a late payment;Go over your credit limit;Make a payment that is returned; orDo any of the above on another account that you have with us.How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.How to Avoid Paying Interest on PurchasesYour due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month.
Minimum Interest Charge
If you are charged interest, the charge will be no less than $1.50.
For Credit Card Tips from the Federal Reserve BoardTo learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
FeesSet-up and Maintenance FeesNOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209.Annual Fee:
$20Account Set-up Fee: $20 (one-time fee)Participation Fee: $12 annually ($1 per month)Additional Card Fee: $5 annually (if applicable)
Transaction FeesBalance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greaterForeign Transaction:
2% of each transaction in U.S. dollarsPenalty FeesLate Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000
Over-the-limit: $29Returned Payment: $35* How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).”* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your billAnnual Percentage Rate (APR) for PurchasesInterest rate paid for purchasesMultiple interest rates may be listed - final interest rate may depend on creditworthiness of the applicant Credit cards may charge many different types of interest ratesSlide20
Interest Rates and Interest Charges
Annual Percentage Rate (APR) for Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate.
APR for Balance Transfers
15.99%
This APR will vary with the market based on the Prime Rate
APR for Cash Advances21.99%This APR will vary with the market based on the Prime Rate
Penalty APR and When it Applies
28.99%This APR may be applied to your account if you:Make a late payment;Go over your credit limit;Make a payment that is returned; orDo any of the above on another account that you have with us.How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.How to Avoid Paying Interest on PurchasesYour due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month.
Minimum Interest Charge
If you are charged interest, the charge will be no less than $1.50.
For Credit Card Tips from the Federal Reserve BoardTo learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
FeesSet-up and Maintenance FeesNOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209.Annual Fee:
$20Account Set-up Fee: $20 (one-time fee)Participation Fee: $12 annually ($1 per month)Additional Card Fee: $5 annually (if applicable)
Transaction FeesBalance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greaterForeign Transaction:
2% of each transaction in U.S. dollarsPenalty FeesLate Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000
Over-the-limit: $29Returned Payment: $35* How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).”* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your billFixed vs. Variable-rate APRFixed-rate APR- an APR that cannot change during the period of time outlined in a credit card agreementVariable-rate APR- an APR that may change depending on other factors (such as economic conditions)
What is the APR for Purchases for this credit card offer?
14.99%
Is this a variable-rate APR or a fixed-rate APR?Variable-rate APRSlide21
Interest Rates and Interest Charges
Annual Percentage Rate (APR) for Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate.
APR for Balance Transfers
15.99%
This APR will vary with the market based on the Prime Rate
APR for Cash Advances21.99%This APR will vary with the market based on the Prime Rate
Penalty APR and When it Applies
28.99%This APR may be applied to your account if you:Make a late payment;Go over your credit limit;Make a payment that is returned; orDo any of the above on another account that you have with us.How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.How to Avoid Paying Interest on PurchasesYour due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month.
Minimum Interest Charge
If you are charged interest, the charge will be no less than $1.50.
For Credit Card Tips from the Federal Reserve BoardTo learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
FeesSet-up and Maintenance FeesNOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209.Annual Fee:
$20Account Set-up Fee: $20 (one-time fee)Participation Fee: $12 annually ($1 per month)Additional Card Fee: $5 annually (if applicable)
Transaction FeesBalance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greaterForeign Transaction:
2% of each transaction in U.S. dollarsPenalty FeesLate Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000
Over-the-limit: $29Returned Payment: $35* How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).”* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your billIntroductory RateIntroductory rate- the APR that may be charged after a credit card account is openedWill have a different APR (usually higher) after the introductory period endsNot all credit cards have an introductory rateWhat is the introductory rate for this credit card offer?
The introductory rate depends on the creditworthiness of the applicant, but it will be 12.99%, 13.99%, or 14.99%Slide22
Interest Rates and Interest Charges
Annual Percentage Rate (APR) for Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate.
APR for Balance Transfers
15.99%
This APR will vary with the market based on the Prime Rate
APR for Cash Advances21.99%This APR will vary with the market based on the Prime Rate
Penalty APR and When it Applies
28.99%This APR may be applied to your account if you:Make a late payment;Go over your credit limit;Make a payment that is returned; orDo any of the above on another account that you have with us.How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.How to Avoid Paying Interest on PurchasesYour due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month.
Minimum Interest Charge
If you are charged interest, the charge will be no less than $1.50.
For Credit Card Tips from the Federal Reserve BoardTo learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
FeesSet-up and Maintenance FeesNOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209.Annual Fee:
$20Account Set-up Fee: $20 (one-time fee)Participation Fee: $12 annually ($1 per month)Additional Card Fee: $5 annually (if applicable)
Transaction FeesBalance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greaterForeign Transaction:
2% of each transaction in U.S. dollarsPenalty FeesLate Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000
Over-the-limit: $29Returned Payment: $35* How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).”* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your billAPR for Balance Transfers & Cash AdvancesA balance transfer is the act of transferring debt from one credit card account to anotherA cash advance includes withdrawing cash from an ATM using a credit cardBalance transfer and cash advance fees may also apply (even if the APR is 0%)Slide23
Interest Rates and Interest Charges
Annual Percentage Rate (APR) for Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate.
APR for Balance Transfers
15.99%
This APR will vary with the market based on the Prime Rate
APR for Cash Advances21.99%This APR will vary with the market based on the Prime Rate
Penalty APR and When it Applies
28.99%This APR may be applied to your account if you:Make a late payment;Go over your credit limit;Make a payment that is returned; orDo any of the above on another account that you have with us.How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.How to Avoid Paying Interest on PurchasesYour due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month.
Minimum Interest Charge
If you are charged interest, the charge will be no less than $1.50.
For Credit Card Tips from the Federal Reserve BoardTo learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
FeesSet-up and Maintenance FeesNOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209.Annual Fee:
$20Account Set-up Fee: $20 (one-time fee)Participation Fee: $12 annually ($1 per month)Additional Card Fee: $5 annually (if applicable)
Transaction FeesBalance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greaterForeign Transaction:
2% of each transaction in U.S. dollarsPenalty FeesLate Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000
Over-the-limit: $29Returned Payment: $35* How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).”* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your billPenalty APR and When it AppliesDiscloses the penalty APR and the penalty terms that trigger the penalty APR to take effect Penalty APR is the interest rate charged on new transactions if the penalty terms in the credit card contract are triggeredWhat is the Penalty APR for this credit card offer?
21.99%Slide24
Interest Rates and Interest Charges
Annual Percentage Rate (APR) for Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate.
APR for Balance Transfers
15.99%
This APR will vary with the market based on the Prime Rate
APR for Cash Advances21.99%This APR will vary with the market based on the Prime Rate
Penalty APR and When it Applies
28.99%This APR may be applied to your account if you:Make a late payment;Go over your credit limit;Make a payment that is returned; orDo any of the above on another account that you have with us.How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.How to Avoid Paying Interest on PurchasesYour due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month.
Minimum Interest Charge
If you are charged interest, the charge will be no less than $1.50.
For Credit Card Tips from the Federal Reserve BoardTo learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
FeesSet-up and Maintenance FeesNOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209.Annual Fee:
$20Account Set-up Fee: $20 (one-time fee)Participation Fee: $12 annually ($1 per month)Additional Card Fee: $5 annually (if applicable)
Transaction FeesBalance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greaterForeign Transaction:
2% of each transaction in U.S. dollarsPenalty FeesLate Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000
Over-the-limit: $29Returned Payment: $35* How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).”* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your billHow To Avoid Paying Interest on PurchasesExplains how you can avoid interest charges by paying credit card bills in full every monthMinimum Interest ChargeTypically range from $0.50 to $2 per monthSlide25
Interest Rates and Interest Charges
Annual Percentage Rate (APR) for Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate.
APR for Balance Transfers
15.99%
This APR will vary with the market based on the Prime Rate
APR for Cash Advances21.99%This APR will vary with the market based on the Prime Rate
Penalty APR and When it Applies
28.99%This APR may be applied to your account if you:Make a late payment;Go over your credit limit;Make a payment that is returned; orDo any of the above on another account that you have with us.How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.How to Avoid Paying Interest on PurchasesYour due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month.
Minimum Interest Charge
If you are charged interest, the charge will be no less than $1.50.
For Credit Card Tips from the Federal Reserve BoardTo learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
FeesSet-up and Maintenance FeesNOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209.Annual Fee:
$20Account Set-up Fee: $20 (one-time fee)Participation Fee: $12 annually ($1 per month)Additional Card Fee: $5 annually (if applicable)
Transaction FeesBalance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greaterForeign Transaction:
2% of each transaction in U.S. dollarsPenalty FeesLate Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000
Over-the-limit: $29Returned Payment: $35* How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).”* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your billSet-up and Maintenance FeesAny set-up and maintenance fees for the cardAnnual fee- a yearly fee that may be charged for having a credit card What is the annual fee for this credit card?
$20
Credit cards may charge many different types of feesSlide26
Interest Rates and Interest Charges
Annual Percentage Rate (APR) for Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate.
APR for Balance Transfers
15.99%
This APR will vary with the market based on the Prime Rate
APR for Cash Advances21.99%This APR will vary with the market based on the Prime Rate
Penalty APR and When it Applies
28.99%This APR may be applied to your account if you:Make a late payment;Go over your credit limit;Make a payment that is returned; orDo any of the above on another account that you have with us.How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.How to Avoid Paying Interest on PurchasesYour due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month.
Minimum Interest Charge
If you are charged interest, the charge will be no less than $1.50.
For Credit Card Tips from the Federal Reserve BoardTo learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
FeesSet-up and Maintenance FeesNOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209.Annual Fee:
$20Account Set-up Fee: $20 (one-time fee)Participation Fee: $12 annually ($1 per month)Additional Card Fee: $5 annually (if applicable)
Transaction FeesBalance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greaterForeign Transaction:
2% of each transaction in U.S. dollarsPenalty FeesLate Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000
Over-the-limit: $29Returned Payment: $35* How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).”* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your billTransaction FeesDiscloses any transaction fees for the cardBalance transfer feesCash advance feesMay be charged in addition to APRSlide27
Interest Rates and Interest Charges
Annual Percentage Rate (APR) for Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate.
APR for Balance Transfers
15.99%
This APR will vary with the market based on the Prime Rate
APR for Cash Advances21.99%This APR will vary with the market based on the Prime Rate
Penalty APR and When it Applies
28.99%This APR may be applied to your account if you:Make a late payment;Go over your credit limit;Make a payment that is returned; orDo any of the above on another account that you have with us.How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.How to Avoid Paying Interest on PurchasesYour due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month.
Minimum Interest Charge
If you are charged interest, the charge will be no less than $1.50.
For Credit Card Tips from the Federal Reserve BoardTo learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
FeesSet-up and Maintenance FeesNOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209.Annual Fee:
$20Account Set-up Fee: $20 (one-time fee)Participation Fee: $12 annually ($1 per month)Additional Card Fee: $5 annually (if applicable)
Transaction FeesBalance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greaterForeign Transaction:
2% of each transaction in U.S. dollarsPenalty FeesLate Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000
Over-the-limit: $29Returned Payment: $35* How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).”* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your billPenalty FeesDiscloses the penalty fees for the card (in addition to Penalty APR)Late-payment- charged when a cardholder does not make the minimum monthly payment by the due dateOver-the-limit-charged if the account balance goes over the set credit limitHow we calculate your balanceCredit card companies can use one of several methods to calculate the outstanding balance on a credit cardSlide28
Interest Rates and Interest Charges
Annual Percentage Rate (APR) for Purchases
12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate.
APR for Balance Transfers
15.99%
This APR will vary with the market based on the Prime Rate
APR for Cash Advances21.99%This APR will vary with the market based on the Prime Rate
Penalty APR and When it Applies
28.99%This APR may be applied to your account if you:Make a late payment;Go over your credit limit;Make a payment that is returned; orDo any of the above on another account that you have with us.How long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due.How to Avoid Paying Interest on PurchasesYour due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month.
Minimum Interest Charge
If you are charged interest, the charge will be no less than $1.50.
For Credit Card Tips from the Federal Reserve BoardTo learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard
FeesSet-up and Maintenance FeesNOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209.Annual Fee:
$20Account Set-up Fee: $20 (one-time fee)Participation Fee: $12 annually ($1 per month)Additional Card Fee: $5 annually (if applicable)
Transaction FeesBalance Transfer: Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100)Cash Advance: Either $5 or 3% of the amount of each cash advance, whichever is greaterForeign Transaction:
2% of each transaction in U.S. dollarsPenalty FeesLate Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000
Over-the-limit: $29Returned Payment: $35* How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).”* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your billLoss of Introductory APRIf the card has an introductory rate, this area will list how the lower introductory rate can be lost How can the introductory APR be lost on this card?
If the cardholder is more than 60 days late in paying the bill
What APR will the cardholder be charged if the introductory rate is lost?
The Penalty APR of 28.99%Slide29
Credit Card Chaos
Fixed-rate APR for Purchases vs. Variable-rate APR for PurchasesIntroductory Rate vs. No Introductory Rate
APR for Purchases Greater than or Equal to 15% vs. APR for Purchases Less than 15%
No Minimum Interest Charge
vs
Minimum Interest Charge
Annual Fee vs. No Annual Fee
Balance Transfer Fee vs. No Balance Transfer Fee
Why is it important to understand how to read a credit card offer?Slide30
Receiving a Credit Card
Generally must be 21 years of age or older
UNLESS
Show documentation of sufficient income
Have a co-signer
If someone is a co-signer on a an account, they are equally as responsible and their credit report is impactedSlide31
Receiving a Credit Card
Credit card companies send
pre-approved
credit card applications in the mail when the individual has passed their initial credit checkSlide32
Credit Card StatementsOutline important information about the card
The 2009 CARD Act required credit card companies to include specific information about a card account in the statement
Andrew’s Credit Card Statement
Please help Andrew interpret his credit card statementSlide33
Transactions
Reference Number
Trans Date
Post Date
Description of Transaction or Credit
Amount
XXXX1
2/22
2/23
Store #1$529.57XXXX22/252/26Payment$450.00 -
XXXX3
2/26
2/26Cash Advance$318.00
XXXX43/153/17
Balance Transfer$785.00Fees
XXXX52/232/23
Late Fee$35.00XXXX6
2/272/27Balance Transfer Fee$23.55XXXX72/282/28Cash Advance Fee$10.90 Total Fees for this Period$69.45Interest Charged Interest Charge on Purchases
$6.31 Interest Charge on Cash Advances$4.58
Total Interest for this Period$10.89
Payment InformationNew Balance$1784.53Minimum Payment Due$53.00Payment Due Date4/20/12
Late Payment Warning:
If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99%
Minimum Payment Warning:
If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example…
Interest Charge Calculation
Type of Balance
Annual Percentage Rate (APR)
Balance Subject to Interest Rate
Interest Charge
Purchases
14.99%
$512.14
$6.31
Cash Advances
21.99%
$253.50
$4.58
Balance Transfers
0.00%
$637.50
$0.00
Summary of Account Activity
Previous Balance
535.07
Payments
-450.00
Purchases
+529.57
Balance Transfers
+785.00
Cash Advances
+318.00
Past Due Amount
+0.00
Fees Charged
+69.45
Interest Charged
+10.89
New Balance
$1,784.53
Credit Limit
$2,000.00
Available credit
$215.47
Statement closing date
3/22/2012
Days in billing cycle
30
If you make no additional charges using this card and each month you pay…
You will pay off the balance shown on this statement in about…
And you will end up paying an estimated total of…
Only the minimum payment
10 years
$3,284
$62
3 years
$2,232
Notice of Changes to Your Interest Rates
You have triggered the Penalty APR of 28.99%. This change will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely.
Transactions made before 4/9/12:
Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to
those
transactions as well.
Important Changes to Your Account Terms
The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12,
APR
for Purchases will increase to 16.99%.
Transactions made before 4/9/12:
Current APRs will continue to apply to these transactions.
2012 Totals Year-to-Date
Total fees charged in 2012
$90.14
Total interest charged in 2012
$18.27
Andrew’s Credit Card Statement
Summary of Account Activity
Payment and credit amounts
Purchase totals
Balance transfer and cash advance totals
Fee and interest charges
Amount past due
New balance
Available credit
How much did Andrew charge in new purchases during this credit card billing cycle?
$529.57
10
9
8
7
6
5
4
3
2
1Slide34
Transactions
Reference Number
Trans Date
Post Date
Description of Transaction or Credit
Amount
XXXX1
2/22
2/23
Store #1$529.57XXXX22/252/26Payment$450.00 -
XXXX3
2/26
2/26Cash Advance$318.00
XXXX43/153/17
Balance Transfer$785.00Fees
XXXX52/232/23
Late Fee$35.00XXXX6
2/272/27Balance Transfer Fee$23.55XXXX72/282/28Cash Advance Fee$10.90 Total Fees for this Period$69.45Interest Charged Interest Charge on Purchases
$6.31 Interest Charge on Cash Advances$4.58
Total Interest for this Period$10.89
Payment InformationNew Balance$1784.53Minimum Payment Due$53.00Payment Due Date4/20/12
Late Payment Warning:
If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99%
Minimum Payment Warning:
If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example…
Interest Charge Calculation
Type of Balance
Annual Percentage Rate (APR)
Balance Subject to Interest Rate
Interest Charge
Purchases
14.99%
$512.14
$6.31
Cash Advances
21.99%
$253.50
$4.58
Balance Transfers
0.00%
$637.50
$0.00
Summary of Account Activity
Previous Balance
535.07
Payments
-450.00
Purchases
+529.57
Balance Transfers
+785.00
Cash Advances
+318.00
Past Due Amount
+0.00
Fees Charged
+69.45
Interest Charged
+10.89
New Balance
$1,784.53
Credit Limit
$2,000.00
Available credit
$215.47
Statement closing date
3/22/2012
Days in billing cycle
30
If you make no additional charges using this card and each month you pay…
You will pay off the balance shown on this statement in about…
And you will end up paying an estimated total of…
Only the minimum payment
10 years
$3,284
$62
3 years
$2,232
Notice of Changes to Your Interest Rates
You have triggered the Penalty APR of 28.99%. This change will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely.
Transactions made before 4/9/12:
Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to
those
transactions as well.
Important Changes to Your Account Terms
The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12,
APR
for Purchases will increase to 16.99%.
Transactions made before 4/9/12:
Current APRs will continue to apply to these transactions.
2012 Totals Year-to-Date
Total fees charged in 2012
$90.14
Total interest charged in 2012
$18.27
Andrew’s Credit Card Statement
10
9
8
7
6
5
4
3
2
1
Payment Information
Includes:
Total new balance
Minimum payment amount
Date payment is due
Payment due dates must be consistent month to month
Monthly statements must be sent at least 21 days before a credit card payment is due
What is Andrew’s minimum payment due for this billing cycle?
$53.00Slide35
Transactions
Reference Number
Trans Date
Post Date
Description of Transaction or Credit
Amount
XXXX1
2/22
2/23
Store #1$529.57XXXX22/252/26Payment$450.00 -
XXXX3
2/26
2/26Cash Advance$318.00
XXXX43/153/17
Balance Transfer$785.00Fees
XXXX52/232/23
Late Fee$35.00XXXX6
2/272/27Balance Transfer Fee$23.55XXXX72/282/28Cash Advance Fee$10.90 Total Fees for this Period$69.45Interest Charged Interest Charge on Purchases
$6.31 Interest Charge on Cash Advances$4.58
Total Interest for this Period$10.89
Payment InformationNew Balance$1784.53Minimum Payment Due$53.00Payment Due Date4/20/12
Late Payment Warning:
If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99%
Minimum Payment Warning:
If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example…
Interest Charge Calculation
Type of Balance
Annual Percentage Rate (APR)
Balance Subject to Interest Rate
Interest Charge
Purchases
14.99%
$512.14
$6.31
Cash Advances
21.99%
$253.50
$4.58
Balance Transfers
0.00%
$637.50
$0.00
Summary of Account Activity
Previous Balance
535.07
Payments
-450.00
Purchases
+529.57
Balance Transfers
+785.00
Cash Advances
+318.00
Past Due Amount
+0.00
Fees Charged
+69.45
Interest Charged
+10.89
New Balance
$1,784.53
Credit Limit
$2,000.00
Available credit
$215.47
Statement closing date
3/22/2012
Days in billing cycle
30
If you make no additional charges using this card and each month you pay…
You will pay off the balance shown on this statement in about…
And you will end up paying an estimated total of…
Only the minimum payment
10 years
$3,284
$62
3 years
$2,232
Notice of Changes to Your Interest Rates
You have triggered the Penalty APR of 28.99%. This change will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely.
Transactions made before 4/9/12:
Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to
those
transactions as well.
Important Changes to Your Account Terms
The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12,
APR
for Purchases will increase to 16.99%.
Transactions made before 4/9/12:
Current APRs will continue to apply to these transactions.
2012 Totals Year-to-Date
Total fees charged in 2012
$90.14
Total interest charged in 2012
$18.27
Andrew’s Credit Card Statement
10
9
8
7
6
5
4
3
2
1
Late Payment Warning
States what will happen if a payment is late- usually additional fees and a higher interest rate
Minimum Payment Warning
Estimate of how long it can take to pay off a credit card balance if only the minimum payment is made each month
How long will it take Andrew to pay off the balance of his credit card if he only pays the minimum payment?
10 yearsSlide36
Transactions
Reference Number
Trans Date
Post Date
Description of Transaction or Credit
Amount
XXXX1
2/22
2/23
Store #1$529.57XXXX22/252/26Payment$450.00 -
XXXX3
2/26
2/26Cash Advance$318.00
XXXX43/153/17
Balance Transfer$785.00Fees
XXXX52/232/23
Late Fee$35.00XXXX6
2/272/27Balance Transfer Fee$23.55XXXX72/282/28Cash Advance Fee$10.90 Total Fees for this Period$69.45Interest Charged Interest Charge on Purchases
$6.31 Interest Charge on Cash Advances$4.58
Total Interest for this Period$10.89
Payment InformationNew Balance$1784.53Minimum Payment Due$53.00Payment Due Date4/20/12
Late Payment Warning:
If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99%
Minimum Payment Warning:
If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example…
Interest Charge Calculation
Type of Balance
Annual Percentage Rate (APR)
Balance Subject to Interest Rate
Interest Charge
Purchases
14.99%
$512.14
$6.31
Cash Advances
21.99%
$253.50
$4.58
Balance Transfers
0.00%
$637.50
$0.00
Summary of Account Activity
Previous Balance
535.07
Payments
-450.00
Purchases
+529.57
Balance Transfers
+785.00
Cash Advances
+318.00
Past Due Amount
+0.00
Fees Charged
+69.45
Interest Charged
+10.89
New Balance
$1,784.53
Credit Limit
$2,000.00
Available credit
$215.47
Statement closing date
3/22/2012
Days in billing cycle
30
If you make no additional charges using this card and each month you pay…
You will pay off the balance shown on this statement in about…
And you will end up paying an estimated total of…
Only the minimum payment
10 years
$3,284
$62
3 years
$2,232
Notice of Changes to Your Interest Rates
You have triggered the Penalty APR of 28.99%. This change will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely.
Transactions made before 4/9/12:
Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to
those
transactions as well.
Important Changes to Your Account Terms
The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12,
APR
for Purchases will increase to 16.99%.
Transactions made before 4/9/12:
Current APRs will continue to apply to these transactions.
2012 Totals Year-to-Date
Total fees charged in 2012
$90.14
Total interest charged in 2012
$18.27
Andrew’s Credit Card Statement
10
9
8
7
6
5
4
3
2
1
Notice of Changes to Your Interest Rates
If a cardholder triggers the Penalty APR, they must be notified that their rates will be increasing
Has Andrew triggered
the Penalty APR?
Yes, he will pay 28.99% on all transactions made after 4/9/12.Slide37
Transactions
Reference Number
Trans Date
Post Date
Description of Transaction or Credit
Amount
XXXX1
2/22
2/23
Store #1$529.57XXXX22/252/26Payment$450.00 -
XXXX3
2/26
2/26Cash Advance$318.00
XXXX43/153/17
Balance Transfer$785.00Fees
XXXX52/232/23
Late Fee$35.00XXXX6
2/272/27Balance Transfer Fee$23.55XXXX72/282/28Cash Advance Fee$10.90 Total Fees for this Period$69.45Interest Charged Interest Charge on Purchases
$6.31 Interest Charge on Cash Advances$4.58
Total Interest for this Period$10.89
Payment InformationNew Balance$1784.53Minimum Payment Due$53.00Payment Due Date4/20/12
Late Payment Warning:
If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99%
Minimum Payment Warning:
If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example…
Interest Charge Calculation
Type of Balance
Annual Percentage Rate (APR)
Balance Subject to Interest Rate
Interest Charge
Purchases
14.99%
$512.14
$6.31
Cash Advances
21.99%
$253.50
$4.58
Balance Transfers
0.00%
$637.50
$0.00
Summary of Account Activity
Previous Balance
535.07
Payments
-450.00
Purchases
+529.57
Balance Transfers
+785.00
Cash Advances
+318.00
Past Due Amount
+0.00
Fees Charged
+69.45
Interest Charged
+10.89
New Balance
$1,784.53
Credit Limit
$2,000.00
Available credit
$215.47
Statement closing date
3/22/2012
Days in billing cycle
30
If you make no additional charges using this card and each month you pay…
You will pay off the balance shown on this statement in about…
And you will end up paying an estimated total of…
Only the minimum payment
10 years
$3,284
$62
3 years
$2,232
Notice of Changes to Your Interest Rates
You have triggered the Penalty APR of 28.99%. This change will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely.
Transactions made before 4/9/12:
Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to
those
transactions as well.
Important Changes to Your Account Terms
The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12,
APR
for Purchases will increase to 16.99%.
Transactions made before 4/9/12:
Current APRs will continue to apply to these transactions.
2012 Totals Year-to-Date
Total fees charged in 2012
$90.14
Total interest charged in 2012
$18.27
Andrew’s Credit Card Statement
10
9
8
7
6
5
4
3
2
1
Important Changes to Your Account Terms
Cardholders must be notified of any raise in rates or fees or any other significant changes to the account at least 45 days before the changes take effect
Any changes can only apply to future transactions (new charges)
Consumer has the option of closing the account before the changes go into effectSlide38
Transactions
Reference Number
Trans Date
Post Date
Description of Transaction or Credit
Amount
XXXX1
2/22
2/23
Store #1$529.57XXXX22/252/26Payment$450.00 -
XXXX3
2/26
2/26Cash Advance$318.00
XXXX43/153/17
Balance Transfer$785.00Fees
XXXX52/232/23
Late Fee$35.00XXXX6
2/272/27Balance Transfer Fee$23.55XXXX72/282/28Cash Advance Fee$10.90 Total Fees for this Period$69.45Interest Charged Interest Charge on Purchases
$6.31 Interest Charge on Cash Advances$4.58
Total Interest for this Period$10.89
Payment InformationNew Balance$1784.53Minimum Payment Due$53.00Payment Due Date4/20/12
Late Payment Warning:
If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99%
Minimum Payment Warning:
If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example…
Interest Charge Calculation
Type of Balance
Annual Percentage Rate (APR)
Balance Subject to Interest Rate
Interest Charge
Purchases
14.99%
$512.14
$6.31
Cash Advances
21.99%
$253.50
$4.58
Balance Transfers
0.00%
$637.50
$0.00
Summary of Account Activity
Previous Balance
535.07
Payments
-450.00
Purchases
+529.57
Balance Transfers
+785.00
Cash Advances
+318.00
Past Due Amount
+0.00
Fees Charged
+69.45
Interest Charged
+10.89
New Balance
$1,784.53
Credit Limit
$2,000.00
Available credit
$215.47
Statement closing date
3/22/2012
Days in billing cycle
30
If you make no additional charges using this card and each month you pay…
You will pay off the balance shown on this statement in about…
And you will end up paying an estimated total of…
Only the minimum payment
10 years
$3,284
$62
3 years
$2,232
Notice of Changes to Your Interest Rates
You have triggered the Penalty APR of 28.99%. This change will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely.
Transactions made before 4/9/12:
Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to
those
transactions as well.
Important Changes to Your Account Terms
The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12,
APR
for Purchases will increase to 16.99%.
Transactions made before 4/9/12:
Current APRs will continue to apply to these transactions.
2012 Totals Year-to-Date
Total fees charged in 2012
$90.14
Total interest charged in 2012
$18.27
Andrew’s Credit Card Statement
10
9
8
7
6
5
4
3
2
1
Transactions
Includes a list of all the transactions that have occurred since the last statement
Should be reviewed for errors
Fees and Interest Charged
Must list the fees and interest charges separately on the monthly statement
Did Andrew pay a late fee?
Yes, he paid $35.00 for a late fee.Slide39
Transactions
Reference Number
Trans Date
Post Date
Description of Transaction or Credit
Amount
XXXX1
2/22
2/23
Store #1$529.57XXXX22/252/26Payment$450.00 -
XXXX3
2/26
2/26Cash Advance$318.00
XXXX43/153/17
Balance Transfer$785.00Fees
XXXX52/232/23
Late Fee$35.00XXXX6
2/272/27Balance Transfer Fee$23.55XXXX72/282/28Cash Advance Fee$10.90 Total Fees for this Period$69.45Interest Charged Interest Charge on Purchases
$6.31 Interest Charge on Cash Advances$4.58
Total Interest for this Period$10.89
Payment InformationNew Balance$1784.53Minimum Payment Due$53.00Payment Due Date4/20/12
Late Payment Warning:
If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99%
Minimum Payment Warning:
If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example…
Interest Charge Calculation
Type of Balance
Annual Percentage Rate (APR)
Balance Subject to Interest Rate
Interest Charge
Purchases
14.99%
$512.14
$6.31
Cash Advances
21.99%
$253.50
$4.58
Balance Transfers
0.00%
$637.50
$0.00
Summary of Account Activity
Previous Balance
535.07
Payments
-450.00
Purchases
+529.57
Balance Transfers
+785.00
Cash Advances
+318.00
Past Due Amount
+0.00
Fees Charged
+69.45
Interest Charged
+10.89
New Balance
$1,784.53
Credit Limit
$2,000.00
Available credit
$215.47
Statement closing date
3/22/2012
Days in billing cycle
30
If you make no additional charges using this card and each month you pay…
You will pay off the balance shown on this statement in about…
And you will end up paying an estimated total of…
Only the minimum payment
10 years
$3,284
$62
3 years
$2,232
Notice of Changes to Your Interest Rates
You have triggered the Penalty APR of 28.99%. This change will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely.
Transactions made before 4/9/12:
Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to
those
transactions as well.
Important Changes to Your Account Terms
The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows:
Transactions made on or after 4/9/12:
As of 5/10/12,
APR
for Purchases will increase to 16.99%.
Transactions made before 4/9/12:
Current APRs will continue to apply to these transactions.
2012 Totals Year-to-Date
Total fees charged in 2012
$90.14
Total interest charged in 2012
$18.27
Andrew’s Credit Card Statement
10
9
8
7
6
5
4
3
2
1
Year-to-Date Totals
Total amount paid in fees and interest charges for the current year
What is the total amount of interest Andrew has paid in the year 2012?
$18.27
Interest Charge Calculation
Includes a summary of the
the
different types of transactions
Why is it important to understand how to read a credit card statement?Slide40
Truth in Lending Act
Limits liability for unauthorized credit card charges to $50.00 per card
Must write a letter within 60 days of the first bill containing the error
If a credit card number is used fraudulently but the card itself was not used, the individual has no personal liabilitySlide41
Credit Card Safety Tips
Sign card with a signature and “Please see ID”
Do not leave cards lying around, and report lost or stolen cards promptly
Close unwanted accounts by writing and phone, then cut up the card
Do not give out account numbers unless making a purchase
Keep a list of all cards, account numbers, and phone lists separate from cards
Shred all pre-approved credit card offers, applications, or solicitations
What are safety tips for using a credit card?
Brainstorm!Slide42
Summary
A credit card is pre-approved credit which can be used for the purchase of goods and services now and payment of them later
To avoid paying interest on a credit card, pay the balance in full every month
A credit card can have a positive or a negative impact on an individual’s credit historySlide43
Summary
Credit card companies are required to disclose the terms and fees of a credit card in the Schumer’s box
Credit card statements outline important information about a credit card and should be checked carefully for errors
Consumers have many protections and rights in regards to credit card use