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When Credit Cards Attack!

When Credit Cards Attack!. Interest on unpaid balance 14%, 20%, 32%... or more! Penalty fees for late payments. Use a Credit Card? No!.

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When Credit Cards Attack!

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  1. When Credit Cards Attack! • Interest on unpaid balance • 14%, 20%, 32%... or more! • Penalty fees for late payments

  2. Use a Credit Card? No! “Giving consumers the use of a credit card is similar to giving people the keys to a car without driving lessons or having a license. If they are lucky, they'll learn by only having some fender benders. But millions get into multiple car accidents that spin out of control and eventually into bankruptcy.” “When someone is carrying any credit card debt, it means they are falling behind instead of getting ahead, and that means there's a problem. When people ask how much credit card debt is okay, it's a little like asking how much TNT can you keep in your basement. You probably could keep some and get along okay. But the smartest move is not to keep any.”

  3. Use a Credit Card? No! • What happens if you’re late with your payment? • You’re hit with late fees. • Your interest rate can go up immediately. • What other problems with credit cards are there? • No limit on how high the interest rate can go. • Your interest rate can go up anytime with a 15-day notice. • Average household credit card debt: $9,900. • Average college student credit card debt: $2,200

  4. $2,500.00 Cumulative Interest Remaining Balance $2,000.00 $1,500.00 Balance: $2,200 Interest: $1,717 $1,000.00 Total: $3,917 $500.00 $0.00 months 0 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 $2,200 $1,717 Paying just the minimum amount on a $2,220 balance means… , and… • it will take you 15 years to pay it all off • it will cost you an additional$1,717 in interest!

  5. Use a Credit Card? Yes! • Credit cards have some big advantages over debit cards: • Liability for card fraud is $50 by law, if reported within 60 days. • With debit card, liability is up to $500, and only 2 days! • You can refuse to pay for unreceived or defective goods. • If a billing error occurs, you don’t have to pay that amount while it’s being investigated. With a debit card, that money is gone while they investigate. • Reward credit cards are common. Not so for debit cards. • Many credit cards give you extras. Not so for debit cards. • Credit cards, used wisely, build your credit score.

  6. Use a Credit Card?? Well… • Yes, if you follow these rules: • Pay off the entire balance every month. • Corollary: if you can’t afford it, don’t buy it. • Always be on time with your payments. • … and consider these suggestions: • Don’t get a card with an annual fee. • Do get a card with rewards. “Credit cards are the best of products and the worst of products.” Stephen Brobeck, Consumer Federation of America

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