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Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

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Page 1: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

Understanding Your Credit Card

Credit UnitTake Charge of Your

Finances

Page 2: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Credit

When goods, services or money is received in exchange for a promise to pay a definite sum

of money at a future date

The price of money- when referring to credit, interest is the charge for

borrowing money

CREDIT-

INTEREST-

Page 3: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Lender and Borrower

LENDER-The person or

organization who has the resources

to provide the individual with a

loan

BORROWER-

The person or organization that is

receiving the money from the

lender

Page 4: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Closed-end vs. Open-end Credit

Characteristics

Closed-end credit

Open-end (revolving)

credit

Definition A one-time loanCredit extended in

advance

Purpose of loan

Specified in application

May be used for a variety of purposes

Page 5: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Closed-end vs. Open-end Credit

Characteristics

Closed-end credit

Open-end credit

PaymentsSpecified number

of equal payments

Varies- can be paid in one payment or a series of equal or unequal payments

Loan Amount

Agreed upon during the application

process

May be increased for responsible

consumers

ExamplesMortgage,

automobile, education loans

Credit cards

Page 6: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Credit Card

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 an individual’s

perceived creditworthinessCredit limit is the maximum dollar amount

loaned

Creditworthiness is an individuals ability and

willingness to pay the money back

Page 7: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

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)

Page 8: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Minimum Payments

• Required to make at least a minimum payment each month– Usually 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 balance– Pay substantially more than what was

initially charged to the card

Page 9: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Minimum Payments

Amount charged to credit card in

one purchas

e

APRMinimu

m payment

Time to pay off

the credit card

Total amount paid in interest

Total amount

paid

$2,000 18% $50.00 62 months $1,077.25 $3,077.25

$500 12% $25.00 23 months $60.67 $560.67

Page 10: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Advantages to using Credit Cards

AdvantagesConvenient payment

toolUseful 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 card

because of the Fair Credit Billing Act protectionPossibility of receiving

bonuses, such as frequent flyer miles or cash rebates

Page 11: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Disadvantages to using Credit Cards

DisadvantagesInterest can be costly

when a balance is revolvedAdditional

penalty fees may apply

Tempting to overspend

Risk of identity theft

Responsible for lost/stolen cards

Applying for multiple accounts can lower your

credit score

Page 12: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Debit Cards

• What 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?

Page 13: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Credit History

Credit ReportA 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 history

Page 14: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

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 credit

Page 15: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Positive Credit Card Use

• Examples of positive credit card behaviors:– Paying credit card balances in full every

month– Paying 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 errors

Page 16: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

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 score

Page 17: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Negative CreditCard use

• Examples of negative credit card behaviors:–Making late credit card payments– Paying only the minimum payment– Exceeding the card’s credit limit (usually

triggers a penalty fee)– Charging items that can’t be paid off

immediately– Owning too many credit cards

Page 18: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

NO Credit

• If 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 credit

Page 19: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

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

Page 20: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

Annual Percentage Rate (APR) for

PurchasesThis section discloses the interest paid for

purchases on the card. Multiple interest rates

may be listed here, because the final interest rate may

depend on the creditworthiness of the

applicant

Page 21: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

Introductory RateIf the credit card has an introductory rate it will be shown in this section, which is the

APR charged during the credit card's

introductory period after a credit card account is opened. The card will have a different APR after the introductory

period endsWhat 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%

Page 22: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

Variable-rate APRSome cards will have a variable-rate APR, which is an APR that

may change depending on other factors, such as the prime rate. The prime rate is an index

that represents the interest rate most banks charge their most credit-worthy

customers 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 APR

Page 23: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

APR for Balance Transfers

This section discloses the interest paid for balance transfers, which is the act of

transferring debt from one credit card account

to another. Balance transfer fees may apply,

even if the balance transfer APR is 0% What is the APR for balance transfers for this

credit card offer?15.99%

Page 24: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

APR for Cash Advances

This section discloses the interest paid for

cash advances, such as withdrawing cash from an ATM using a credit

card. Cash advance fees may also apply

What is the APR for cash advances for this credit

card offer?21.99%

Page 25: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

Penalty APR and When it Applies

This section discloses the penalty APR, as well

as 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 triggered

What is the Penalty APR for this credit card offer?

21.99%

Page 26: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

How To Avoid Paying

Interest on Purchases

This section explains how you can avoid

interest charges on a credit cardHow can a cardholder

avoid paying interest on a credit card?By paying credit card

bills in full by the due date

Page 27: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

Minimum Interest Charge

Credit card companies often have a minimum interest

amount. These charges typically

range from $0.50 to $2 per month and are

disclosed in this section of the credit

card offerWhat is the minimum

interest charge for this credit card?$1.50

Page 28: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

For Credit Card Tips from the

Federal Reserve Board

This section directs consumers to the Federal Reserve website to obtain more information about credit cards

Page 29: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

Set-up and Maintenance FeesThis section discloses

any set-up and maintenance fees for the card, which can include annual fees, account set-up fees, participation fees,

and additional card fees

•Annual fee is a yearly fee that may be charged for having a credit card

What is the annual fee for this credit card?

$20

Page 30: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

Transcation FeesThis section discloses any transaction fees for the card, which can include balance transfer fees, cash advance fees, and foreign transaction

fees What is the fee for cash advances for this card?

$5 or 3% of the amount of each cash advance (whichever is

greater)

Page 31: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

Penalty FeesThis section discloses the penalty fees for the card, which can

include late-payment, over-the-limit, and returned payment

fees

•Late payment fee is charged when a cardholder does not make the minimum monthly payment by the due date•Over-the-limit fee is charged if the account balance goes over the set credit limit

Does this card have an over-the limit fee?

Yes, the over-the-limit fee is $29.

Page 32: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

How we calculate your balance

Credit card companies can use

one of several methods to calculate

the outstanding balance on a credit card. The method

used is disclosed in this section

What method is used to calculate the balance on

this card?Average daily balance (including new

purchases)

Page 33: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Interest Rates and Interest ChargesAnnual 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 Advances

21.99%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:1.Make a late payment;2.Go over your credit limit;3.Make a payment that is returned; or4.Do 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 Purchases

Your 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 Board

To 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 Fees

NOTICE: 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 Fees

Balance 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 greater

Foreign Transaction: 2% of each transaction in U.S. dollarsPenalty Fees Late Payment: $29 if balance is less than or equal to $1000

OR $35 if balance is more than $1000 Over-the-limit: $29 Returned 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 bill

Loss 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 billWhat APR will the

cardholder be charged if the introductory rate

is lost?The Penalty APR of 28.99%

Page 34: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Credit Card Chaos

• The educator will identify terms associated with a credit card offer

• Identify which term is true on your provided credit card offer and move to that poster

• In a small group, define the term on the poster

• As a class, discuss which credit card characteristic is better for a consumer and why

Page 35: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Credit Card Chaos

• Fixed-rate APR for Purchases vs. Variable-rate APR for Purchases

• Introductory 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• Late Payment Fees vs. No Late Payment Fees

Page 36: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Credit Card Benefits

• Research benefits that may be received from the card– Cash rebates– Warranties for items purchased with the card– Travel accident insurance– Frequent flyer miles

• Make sure to know all terms and conditions of card benefits

• Cards that offer benefits may charge fees or higher interest rates

Page 37: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Receiving a Credit Card

1. Compare credit card offers and determine which card to apply for

2. Complete a credit application– A form requesting information about a

person’s ability to repay and the applicant’s age

– Can be completed through the mail, the internet or over the phone

Page 38: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Receiving a Credit Card

3. Lenders conduct a credit investigation– A comparison of information on credit

application to information on a credit report

4. Applicants may or may not be approved for the card they apply for– Approval depends on the applicant's credit

history

Page 39: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Pre-Approved Credit Card Applications

• Credit card companies send pre-approved credit card applications in the mail– If an individual is pre-approved for that

particular card, they have passed the initial credit check

Page 40: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Credit Card Statements

• Credit card statements outline 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 StatementPlease help Andrew interpret his credit card

statement.

Page 41: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

TransactionsReference Number

Trans Date

Post Date

Description of Transaction or Credit

Amount

XXXX1 2/22 2/23 Store #1 $529.57

XXXX2 2/25 2/26 Payment $450.00 -

XXXX3 2/26 2/26 Cash Advance $318.00

XXXX4 3/15 3/17 Balance Transfer $785.00

FeesXXXX5 2/23 2/23 Late Fee $35.00

XXXX6 2/27 2/27 Balance Transfer Fee $23.55

XXXX7 2/28 2/28 Cash Advance Fee $10.90

      Total Fees for this Period $69.45

Interest 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 Date 4/20/12Late 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 CalculationType of Balance

Annual Percentage Rate (APR)

Balance Subject to Interest Rate

Interest Charge

Purchases 14.99% $512.14 $6.31Cash Advances 21.99% $253.50 $4.58Balance Transfers 0.00% $637.50 $0.00

Summary of Account Activity

Previous Balance 535.07Payments -450.00Purchases +529.57Balance Transfers +785.00Cash Advances +318.00Past Due Amount +0.00Fees Charged +69.45Interest Charged +10.89New Balance $1,784.53   Credit Limit $2,000.00Available credit $215.47Statement 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 RatesYou 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 hose transactions as well.

Important Changes to Your Account TermsThe 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-DateTotal fees charged in 2012 $90.14Total interest charged in 2012 $18.27

Andrew’s Credit Card Statement

Summary of Account Activity

This section includes payments, credits, purchases, balance

transfers, cash advances, fees,

interest charges, amounts past due, the new balance, available credit, and the last day

of the billing periodHow much did Andrew charge in new purchases

during this credit card billing cycle?$529.57

10

9

8

7

6

2

4

5

13

Page 42: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

TransactionsReference Number

Trans Date

Post Date

Description of Transaction or Credit

Amount

XXXX1 2/22 2/23 Store #1 $529.57

XXXX2 2/25 2/26 Payment $450.00 -

XXXX3 2/26 2/26 Cash Advance $318.00

XXXX4 3/15 3/17 Balance Transfer $785.00

FeesXXXX5 2/23 2/23 Late Fee $35.00

XXXX6 2/27 2/27 Balance Transfer Fee $23.55

XXXX7 2/28 2/28 Cash Advance Fee $10.90

      Total Fees for this Period $69.45

Interest 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 Date 4/20/12Late 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 CalculationType of Balance

Annual Percentage Rate (APR)

Balance Subject to Interest Rate

Interest Charge

Purchases 14.99% $512.14 $6.31Cash Advances 21.99% $253.50 $4.58Balance Transfers 0.00% $637.50 $0.00

Summary of Account Activity

Previous Balance 535.07Payments -450.00Purchases +529.57Balance Transfers +785.00Cash Advances +318.00Past Due Amount +0.00Fees Charged +69.45Interest Charged +10.89New Balance $1,784.53   Credit Limit $2,000.00Available credit $215.47Statement 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 RatesYou 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 hose transactions as well.

Important Changes to Your Account TermsThe 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-DateTotal fees charged in 2012 $90.14Total interest charged in 2012 $18.27

Andrew’s Credit Card Statement

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2

4

5

13Payment

InformationThis section includes

the total new balance, the minimum payment amount, and the date

payment is due

What is Andrew’s minimum payment due for

this billing cycle?$53.00

Page 43: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

TransactionsReference Number

Trans Date

Post Date

Description of Transaction or Credit

Amount

XXXX1 2/22 2/23 Store #1 $529.57

XXXX2 2/25 2/26 Payment $450.00 -

XXXX3 2/26 2/26 Cash Advance $318.00

XXXX4 3/15 3/17 Balance Transfer $785.00

FeesXXXX5 2/23 2/23 Late Fee $35.00

XXXX6 2/27 2/27 Balance Transfer Fee $23.55

XXXX7 2/28 2/28 Cash Advance Fee $10.90

      Total Fees for this Period $69.45

Interest 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 Date 4/20/12Late 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 CalculationType of Balance

Annual Percentage Rate (APR)

Balance Subject to Interest Rate

Interest Charge

Purchases 14.99% $512.14 $6.31Cash Advances 21.99% $253.50 $4.58Balance Transfers 0.00% $637.50 $0.00

Summary of Account Activity

Previous Balance 535.07Payments -450.00Purchases +529.57Balance Transfers +785.00Cash Advances +318.00Past Due Amount +0.00Fees Charged +69.45Interest Charged +10.89New Balance $1,784.53   Credit Limit $2,000.00Available credit $215.47Statement 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 RatesYou 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 hose transactions as well.

Important Changes to Your Account TermsThe 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-DateTotal fees charged in 2012 $90.14Total interest charged in 2012 $18.27

Andrew’s Credit Card Statement

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4

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13Late Payment

WarningThis section states any additional fees and the

higher interest rate that may be charged if

a payment is late

How much is Andrew’s late payment fee?

$35

Page 44: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

TransactionsReference Number

Trans Date

Post Date

Description of Transaction or Credit

Amount

XXXX1 2/22 2/23 Store #1 $529.57

XXXX2 2/25 2/26 Payment $450.00 -

XXXX3 2/26 2/26 Cash Advance $318.00

XXXX4 3/15 3/17 Balance Transfer $785.00

FeesXXXX5 2/23 2/23 Late Fee $35.00

XXXX6 2/27 2/27 Balance Transfer Fee $23.55

XXXX7 2/28 2/28 Cash Advance Fee $10.90

      Total Fees for this Period $69.45

Interest 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 Date 4/20/12Late 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 CalculationType of Balance

Annual Percentage Rate (APR)

Balance Subject to Interest Rate

Interest Charge

Purchases 14.99% $512.14 $6.31Cash Advances 21.99% $253.50 $4.58Balance Transfers 0.00% $637.50 $0.00

Summary of Account Activity

Previous Balance 535.07Payments -450.00Purchases +529.57Balance Transfers +785.00Cash Advances +318.00Past Due Amount +0.00Fees Charged +69.45Interest Charged +10.89New Balance $1,784.53   Credit Limit $2,000.00Available credit $215.47Statement 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 RatesYou 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 hose transactions as well.

Important Changes to Your Account TermsThe 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-DateTotal fees charged in 2012 $90.14Total interest charged in 2012 $18.27

Andrew’s Credit Card Statement

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2

4

5

13

Minimum Payment Warning

This section includes an estimate of how

long it can take to pay off a credit card

balance if only the minimum payment is

made each month, and an estimate of the total amount paid, including

interest, if the bill is paid in three years

(assuming no additional charges are

made)How long will it take

Andrew to pay off the balance of his credit card if he only pays the minimum

payment?10 years

Page 45: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

TransactionsReference Number

Trans Date

Post Date

Description of Transaction or Credit

Amount

XXXX1 2/22 2/23 Store #1 $529.57

XXXX2 2/25 2/26 Payment $450.00 -

XXXX3 2/26 2/26 Cash Advance $318.00

XXXX4 3/15 3/17 Balance Transfer $785.00

FeesXXXX5 2/23 2/23 Late Fee $35.00

XXXX6 2/27 2/27 Balance Transfer Fee $23.55

XXXX7 2/28 2/28 Cash Advance Fee $10.90

      Total Fees for this Period $69.45

Interest 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 Date 4/20/12Late 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 CalculationType of Balance

Annual Percentage Rate (APR)

Balance Subject to Interest Rate

Interest Charge

Purchases 14.99% $512.14 $6.31Cash Advances 21.99% $253.50 $4.58Balance Transfers 0.00% $637.50 $0.00

Summary of Account Activity

Previous Balance 535.07Payments -450.00Purchases +529.57Balance Transfers +785.00Cash Advances +318.00Past Due Amount +0.00Fees Charged +69.45Interest Charged +10.89New Balance $1,784.53   Credit Limit $2,000.00Available credit $215.47Statement 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 RatesYou 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 hose transactions as well.

Important Changes to Your Account TermsThe 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-DateTotal fees charged in 2012 $90.14Total interest charged in 2012 $18.27

Andrew’s Credit Card Statement

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2

4

5

13Notice of Changes to

Your Interest RatesIf a cardholder triggers the Penalty APR, the

credit card issuer must notify them on their statement 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.

Page 46: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

TransactionsReference Number

Trans Date

Post Date

Description of Transaction or Credit

Amount

XXXX1 2/22 2/23 Store #1 $529.57

XXXX2 2/25 2/26 Payment $450.00 -

XXXX3 2/26 2/26 Cash Advance $318.00

XXXX4 3/15 3/17 Balance Transfer $785.00

FeesXXXX5 2/23 2/23 Late Fee $35.00

XXXX6 2/27 2/27 Balance Transfer Fee $23.55

XXXX7 2/28 2/28 Cash Advance Fee $10.90

      Total Fees for this Period $69.45

Interest 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 Date 4/20/12Late 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 CalculationType of Balance

Annual Percentage Rate (APR)

Balance Subject to Interest Rate

Interest Charge

Purchases 14.99% $512.14 $6.31Cash Advances 21.99% $253.50 $4.58Balance Transfers 0.00% $637.50 $0.00

Summary of Account Activity

Previous Balance 535.07Payments -450.00Purchases +529.57Balance Transfers +785.00Cash Advances +318.00Past Due Amount +0.00Fees Charged +69.45Interest Charged +10.89New Balance $1,784.53   Credit Limit $2,000.00Available credit $215.47Statement 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 RatesYou 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 hose transactions as well.

Important Changes to Your Account TermsThe 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-DateTotal fees charged in 2012 $90.14Total interest charged in 2012 $18.27

Andrew’s Credit Card Statement

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2

4

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13

Important Changes to Your Account

TermsIn this section of the

statement, cardholders must be notified of any raise in rates or fees or

any other significant changes to the account

Other than implementation of the Penalty APR, will

there be any other changes to Andrew’s

account terms?Yes, his APR for

Purchases is increasing to 16.99%.

Page 47: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

TransactionsReference Number

Trans Date

Post Date

Description of Transaction or Credit

Amount

XXXX1 2/22 2/23 Store #1 $529.57

XXXX2 2/25 2/26 Payment $450.00 -

XXXX3 2/26 2/26 Cash Advance $318.00

XXXX4 3/15 3/17 Balance Transfer $785.00

FeesXXXX5 2/23 2/23 Late Fee $35.00

XXXX6 2/27 2/27 Balance Transfer Fee $23.55

XXXX7 2/28 2/28 Cash Advance Fee $10.90

      Total Fees for this Period $69.45

Interest 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 Date 4/20/12Late 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 CalculationType of Balance

Annual Percentage Rate (APR)

Balance Subject to Interest Rate

Interest Charge

Purchases 14.99% $512.14 $6.31Cash Advances 21.99% $253.50 $4.58Balance Transfers 0.00% $637.50 $0.00

Summary of Account Activity

Previous Balance 535.07Payments -450.00Purchases +529.57Balance Transfers +785.00Cash Advances +318.00Past Due Amount +0.00Fees Charged +69.45Interest Charged +10.89New Balance $1,784.53   Credit Limit $2,000.00Available credit $215.47Statement 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 RatesYou 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 hose transactions as well.

Important Changes to Your Account TermsThe 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-DateTotal fees charged in 2012 $90.14Total interest charged in 2012 $18.27

Andrew’s Credit Card Statement

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2

4

5

13

TransactionsThis section includes a

list of all the transactions that have occurred since the last statement (purchases,

payments, credits, cash advances, and

balance transfers). This section should be

carefully reviewed by the cardholder to

ensure there are no unauthorized charges

or errorsHow much did Andrew charge on his credit card

to Store #1?$529.57

Page 48: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

TransactionsReference Number

Trans Date

Post Date

Description of Transaction or Credit

Amount

XXXX1 2/22 2/23 Store #1 $529.57

XXXX2 2/25 2/26 Payment $450.00 -

XXXX3 2/26 2/26 Cash Advance $318.00

XXXX4 3/15 3/17 Balance Transfer $785.00

FeesXXXX5 2/23 2/23 Late Fee $35.00

XXXX6 2/27 2/27 Balance Transfer Fee $23.55

XXXX7 2/28 2/28 Cash Advance Fee $10.90

      Total Fees for this Period $69.45

Interest 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 Date 4/20/12Late 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 CalculationType of Balance

Annual Percentage Rate (APR)

Balance Subject to Interest Rate

Interest Charge

Purchases 14.99% $512.14 $6.31Cash Advances 21.99% $253.50 $4.58Balance Transfers 0.00% $637.50 $0.00

Summary of Account Activity

Previous Balance 535.07Payments -450.00Purchases +529.57Balance Transfers +785.00Cash Advances +318.00Past Due Amount +0.00Fees Charged +69.45Interest Charged +10.89New Balance $1,784.53   Credit Limit $2,000.00Available credit $215.47Statement 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 RatesYou 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 hose transactions as well.

Important Changes to Your Account TermsThe 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-DateTotal fees charged in 2012 $90.14Total interest charged in 2012 $18.27

Andrew’s Credit Card Statement

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13

Fees and Interest Charged

Credit card issuers must list the fees and

interest charges separately on the

monthly statement. Interest charges must

be listed by type of transaction

Did Andrew pay a late fee?

Yes, he paid $35.00 for a late fee.

Page 49: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

TransactionsReference Number

Trans Date

Post Date

Description of Transaction or Credit

Amount

XXXX1 2/22 2/23 Store #1 $529.57

XXXX2 2/25 2/26 Payment $450.00 -

XXXX3 2/26 2/26 Cash Advance $318.00

XXXX4 3/15 3/17 Balance Transfer $785.00

FeesXXXX5 2/23 2/23 Late Fee $35.00

XXXX6 2/27 2/27 Balance Transfer Fee $23.55

XXXX7 2/28 2/28 Cash Advance Fee $10.90

      Total Fees for this Period $69.45

Interest 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 Date 4/20/12Late 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 CalculationType of Balance

Annual Percentage Rate (APR)

Balance Subject to Interest Rate

Interest Charge

Purchases 14.99% $512.14 $6.31Cash Advances 21.99% $253.50 $4.58Balance Transfers 0.00% $637.50 $0.00

Summary of Account Activity

Previous Balance 535.07Payments -450.00Purchases +529.57Balance Transfers +785.00Cash Advances +318.00Past Due Amount +0.00Fees Charged +69.45Interest Charged +10.89New Balance $1,784.53   Credit Limit $2,000.00Available credit $215.47Statement 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 RatesYou 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 hose transactions as well.

Important Changes to Your Account TermsThe 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-DateTotal fees charged in 2012 $90.14Total interest charged in 2012 $18.27

Andrew’s Credit Card Statement

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6

2

4

5

13

Year-to-Date TotalsThe total amount paid

in fees and interest charges for the current year must be shown on

the statement

What is the total amount of interest Andrew has paid in the year 2012?$18.27

Page 50: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

TransactionsReference Number

Trans Date

Post Date

Description of Transaction or Credit

Amount

XXXX1 2/22 2/23 Store #1 $529.57

XXXX2 2/25 2/26 Payment $450.00 -

XXXX3 2/26 2/26 Cash Advance $318.00

XXXX4 3/15 3/17 Balance Transfer $785.00

FeesXXXX5 2/23 2/23 Late Fee $35.00

XXXX6 2/27 2/27 Balance Transfer Fee $23.55

XXXX7 2/28 2/28 Cash Advance Fee $10.90

      Total Fees for this Period $69.45

Interest 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 Date 4/20/12Late 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 CalculationType of Balance

Annual Percentage Rate (APR)

Balance Subject to Interest Rate

Interest Charge

Purchases 14.99% $512.14 $6.31Cash Advances 21.99% $253.50 $4.58Balance Transfers 0.00% $637.50 $0.00

Summary of Account Activity

Previous Balance 535.07Payments -450.00Purchases +529.57Balance Transfers +785.00Cash Advances +318.00Past Due Amount +0.00Fees Charged +69.45Interest Charged +10.89New Balance $1,784.53   Credit Limit $2,000.00Available credit $215.47Statement 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 RatesYou 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 hose transactions as well.

Important Changes to Your Account TermsThe 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-DateTotal fees charged in 2012 $90.14Total interest charged in 2012 $18.27

Andrew’s Credit Card Statement

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9

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7

6

2

4

5

13

Interest Charge Calculation

This section includes a summary of the

interest rates on the different types of

transactions, account balances, the amount

of each, and the interest charged for

each type of transaction What interest rate is

Andrew paying on cash advances?21.99%

Page 51: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Cardholder Protections & Rights

Limits liability for unauthorized credit card

charges to $50.00 per cardMust write a letter within 60 days of the first bill containing the errorIf a credit card number is used fraudulently

but the card itself was not used, the individual has no personal liability

Page 52: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Cardholder Protections & Rights

– To receive a credit card, consumers must be 21 years of age or older• Consumers under 21 have to either have a co-

signer or show documentation of sufficient income to make payments

• If someone agrees to be a co-signer on an account, they are equally responsible for the loan

– Interest rates on existing balances generally can’t be raised unless a cardholder is 60 days or more past due

2009 CARD Act

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Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Cardholder Protections & Rights

–Must be notified of any significant changes in rates and fees at least 45 days before the changes take effect• Any changes made to an account can only apply

to future transactions (new charges) • Have the option of closing the account before the

changes go into effect

– Cardholders now have to “opt-in” to allowing transactions that take them over their credit limit

2009 CARD Act

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Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Cardholder Protections & Rights

– Credit card issuers are required to send a monthly statement at least 21 days before a credit card payment is due

– Credit card payment due dates must be consistent month to month

2009 CARD Act

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Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Cardholder Protections & Rights

– Credit card companies cannot increase rates for the first 12 months after an account is open unless:• The card has a variable interest rate• The cardholder is more than 60 days late in paying

their bill• The card has an introductory rate (the introductory

rate must be in place for at least 6 months and then the rate can increase)

2009 CARD Act

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Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Cardholder Protections & Rights

– Some set-up and maintenance fees are charged before the card is used

– This may reduce the amount of credit initially available• These non-penalty fees cannot exceed 25% of the initial

credit limit • For example, if a card has a credit limit of $1,000 the total

fees for the first year (not including penalty fees) cannot exceed $250

2009 CARD Act

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Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

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

Page 58: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Online Shopping Safety Tips

1. Use a temporary credit card number– This is a one-time use only number– A set amount will be charged to your

credit card– Then a number will be given to you to do

your shopping

2. Use a credit card rather than a debit card– Fair Credit Billing Act

Page 59: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

Fair Credit Billing Act

• Helps to protect consumers while using a credit card to make purchases

• Allows the consumer to not pay for a product or service for which the consumer has a complaint

• If products are not delivered or if it is not what the consumer requested, any amount of money that was credited to the card above the $50.00 fee that consumers are responsible for will be issued back

• Debit cards do not have the same protection

Page 60: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

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 history

Page 61: Credit Card Understanding Your Credit Card Credit Unit Take Charge of Your Finances

Credit Card

© Family Economics & Financial Education –Updated March 2010– Credit Unit – Understanding a Credit CardFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The

University of Arizona

Credit Card

1.4.1.G1

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