Credit & Debit Cards

1. Credit & Debit Cards Personal Finance Mrs. Brewer

2. Let’s Go Shopping…. • Log on to the Internet • Find something you just HAVE to BUY! • Anything you want!

3. Things to Buy…

4. How Can I Pay for It?? • Credit Card • Plastic • Make Purchases without cash in hand • Future Payment • With Interest • Debit Card • Plastic • Make Purchases without Cash in hand • Funds must be available in checking or savings account

5. Advantages & Disadvantages • Credit Card • Funds available to make purchases • Don’t have to carry a lot of $$ • Pay interest on purchases • More convenient • No pin # needed • If lost or stolen not responsible for all purchases • Rewards for using the card • Debit Card • NO INTEREST • Funds need to be available • Usually need a pin # • Need to track purchases and amount of $$ spent • Readily available to use • Don’t have to carry a lot of $$ • Card # can be stolen and used without your knowledge

6. Credit Card Video

7. www.creditcard.com • Student Credit Cards • Who is eligible? • What card would you pick?

8. Terms & Abbreviations • APR = Annual Percentage Rate • V = Variable • Annual Fee = the amount charged by the credit card company for you to have the card.

9. Terms & Abbreviations, cont… • Cosigner = an additional person who agrees to have equal liability for the credit card debt. • Creditworthiness = having an acceptable credit rating.

10. Terms & Abbreviations, cont… • Balance Transfer = the transfer of debt from one credit card to another. • Prepaid Debit Card = a plastic card that acts like an electronic wallet. Like prepaid gift cards.

11. www.nolo.com Let’s use the online credit card payment calculator….

12. Purchase Example • $1,000.00 item • 18.50% APR • $25.00 minimum payment

13. Results!! • 63 months to pay off purchase • $569.27 paid in interest • So…5 years and $1,569.27 later…

14. Was it worth it??