Credit Card Numbers in the US

1. Credit Card Numbers in the US • American Express: 38 million • Visa: 109 million cards • Discover: 49 million • MasterCard: 82 million • Total US credit Debt in 2014: $700 BILLION

2. The True Cost of Paying the Minimum Payment

3. The Credit Card Industry • $40 billion in profits in 2010 • $12 billion in fees • Most credit card companies are more profitable than places like McDonalds and Microsoft

4. Market Control • 6 companies control 65% of the market: • American Express • Bank of America • Citigroup • JP Morgan Chase • MBNA • VISA

5. Affinity Cards • A credit card offered by two groups, one a financial institution and the other a non-financial institution, such as a • College • Airline • Non-profit group • Tim Hortans • West Jet

6. What’s Next? Life After High School

7. Why Students Use Credit Cards • An increase in college costs and a decrease in families’ liquid savings leads to a dependence on loans & credit cards. • Students have a cognitive disconnect between the: • Reality of their current incomes vs. an affordable lifestyle

8. More Reasons Why Students Use Credit Cards • Students want their parents’ lifestyle BUT don’t have the same financial resources. They depend on: • Financial Aid • Families • Part-time work • Credit Cards

9. Consumption and Credit • Students don’t embrace “old school” financial values • Consumption pressure and easy access to credit • Increased social acceptance of debt • Credit is a reward

10. Long-term Effects of Credit • Graduate with: • Student loans • Credit card debt • Affect credit score • Harder to get: • Car loan or insurance • Apartment lease • Mortgage loan • Job

11. College Students’ Money Problems

12. Credit Card Use by Year

13. Credit Cards: The “Other” Drug • Marketing of credit cards on campuses poses a greater threat to students future than almost anything else • Students with high credit card debt are more likely to: • Earn poorer grades • Drop out of school • Suffer from depression • File for bankruptcy • Work more hours to pay bills • No job? • No income? • No problem? • If you are a student, you will be approved!

14. Preparing for Managing Credit on Your Own • Work income • Allowance income • Live on a budget at home • Food • Entertainment • Clothing

15. Managing Credit in College • Get one credit card • Authorized user on parents’ card • Ask parent to cosign card • Secured Card • Pay off the balance every month • Don’t take cash advances • Pay on time

16. Why Credit is Important • FICO or credit score: • Credit Card Issuers & Lenders • Auto Insurers • Determine Premium (Monthly payments) • Employers • Are you a worthy hire? • Landlords • Are you a reliable tenant?

18. 35% Payment History • Late payments have the greatest negative impact. • Recency & frequency are important too.

19. 30% Outstanding Balances • Total balance vs. total available credit. • Are you overextended?

20. 15% Length of Credit History • Number of years you’ve used credit. • How long since you’ve used certain accounts.

21. 10% New Credit • Number of new accounts. • Multiple requests reduce your score.

22. 10% Types of Credit • Mix of: • Revolving Credit • Credit cards • Installment Credit • Car loan • Home loan

23. How to Improve Your Score • Pay all bills on time. • Pay any delinquent bills. • Lower your total credit card debt.