The ABCs of Credit Card Finance Essential Facts for Students

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The ABCs ofCredit Card FinanceEssential Facts
for Students

• 2010
• Carol A. Carolan, Ph.D.

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Essential Facts Two Groups of Information

• Credit Card Costs
• Credit Card Behaviors

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Credit Card Costs
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• Annual Fees
• Interest (APR)
• - CARD Act of 2009
• - APR Stable for One Year
• - Exceptions Promotional Rates, Variable
  APR, 60 Days Behind in Payment,
  Temporary Hardship
• Average Daily Balance Method
• Cash Advances Convenience Checks

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• Payment Allocation
• Default Rates
• Low Interest Introductory Rates
• Balance Transfers
• Late Fees
• Over-Credit-Limit Fees
• Bounced Check Fees
• Currency Conversion Fees
• Payment Fees

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Choosing aCredit Card
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Look For

• A Low, Fixed Annual Percentage Rate (APR)
• No Annual Fee
• A Long Grace Period
• Average Daily Balance Method
• Low Fees

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Types of Credit Card Users

• Convenience Users
• Revolvers

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The Schumer Box
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• Introduced by Senator Schumer
• A Grid Containing Rates Fees
• Easy to Compare Credit Card Offers
• CARD Act Requires Issuers to Post Cardholder
  Agreements on Internet

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Dos and Donts
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• One Card
• Student Loans for Tuition
• Wants vs. Needs
• Convenience
• Pay More Than the MMP
• Be a Manager

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• Dont Skip Payments
• Pay on Time
• Dont Exceed Your Credit Limit
• Cash Advances
• Convenience Checks
• Be Wary of Teaser Rates

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• Credit Card Shuffle
• Low Credit Limit
• Quickly Mail Payments
• Save Receipts
• Change of Address
• Lost and Stolen Cards

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Theres Alwaysa Solution
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Getting Out of Debt

• Dont Deny Problem
• Stop Using Your Card
• Contact Your Credit Card Issuer
• Get a Job
• Reduce Expenses
• Talk about Your Problems
• Debt Consolidation

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Credit Reports Credit Scores
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Credit Report

• Collection of Information
• Financial Report Card
• Lenders Use this Information
• 3 Main Credit Reporting Agencies
• Regularly Review Your Credit Reports

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Credit Score

• Numeric Value Applied to a Credit Report
• Usually Called a FICO Score
• Higher is Better

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What Goes Into OurCredit Scores?

• 35 Payment History
• 30 Total Amount Owed
• Debt-to-Credit Limit Ratio
• 15 Length of Credit History
• 10 New Credit
• 10 Types of Credit

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Consequences of IrresponsibleCredit Card Use
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• High Interest Rates
• Difficulty Renting an Apartment
• Denied Employment
• Graduate School Rejection
• Higher Insurance Premiums
• Big Bucks for Cell Phones
• Higher Deposits

• Denial of Credit

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Identity Theft
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Signs of Identity Theft

• Card/Statement Not Requested
• Statement Not Received
• Unauthorized Charges
• Denied Credit
• Debt Collectors

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Minimize the Risk

• Keep Personal Information Personal
• Dont Use Social Security Number
• Leave Social Security Card Home
• Carry Only Whats Needed
• Photo ID Credit Card
• Know Your Billing Cycles

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• Shred Receipts
• Use the Post Office
• Creative Passwords
• Purchase on Secure Websites
• Keep Personal Information Safe
• Review Credit Reports
• Computer Virus Protection

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Victims of Identity Theft Should

• Contact the Big Three
• Fraud Alert
• Order Free Credit Reports Review
• Call Fraud Departments
• Close Fraudulent Accounts
• File a Police Report
• Contact the FTC

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