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Families and Credit Cards
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  1. FamiliesandCredit Cards A project of Consumer Action and American Express Consumer Action • Families and Credit Cards • American Express

  2. Youth and credit cards • Early discussions about how to use credit can help kids steer clear of trouble when they become adults • You can teach your kids how to get the most out of credit Consumer Action • Families and Credit Cards • American Express

  3. What would kids need a credit card for? • Emergencies • Field trips and other travel • Shopping Consumer Action • Families and Credit Cards • American Express

  4. Credit Yesteryear Activity • What was credit used for in your house growing up? Consumer Action • Families and Credit Cards • American Express

  5. Credit card eligibility • Individual credit cards are issued to people 18 years and older • Your child can be an authorized user on your credit card account • You (the primary cardholder) are responsible for all payments Consumer Action • Families and Credit Cards • American Express

  6. Authorized users • Credit card policies for authorized users (secondary accounts) vary widely: • Minimum age • Account numbers • Billing statements • Credit reporting • 888 - 5OPTOUT • Responsibility • Debt collection Consumer Action • Families and Credit Cards • American Express

  7. Take a Loan? exercise • Please refer to the ‘Take a Loan? Needs and Wants’ Activity Sheet • If you carry a credit card balance, you are taking out a loan to pay for your purchases Consumer Action • Families and Credit Cards • American Express

  8. Discussing credit cards with your children • What would your child use credit for? • Set a spending limit • Responsibility for paying part of the bill Consumer Action • Families and Credit Cards • American Express

  9. Credit and spending management tools • Online access • Statements • Alerts • Financial calculators Consumer Action • Families and Credit Cards • American Express

  10. Minimum payment example • Balance: $1,000 • Interest Rate: 15% • Minimum Payment 3% ($30) Consumer Action • Families and Credit Cards • American Express

  11. Do you know? • How long would it take to pay off a $1,000 balance if only the minimum payment was made? • Nine years Consumer Action • Families and Credit Cards • American Express

  12. Do you know? • How much would you pay in interest if only the minimum payment was made? • $576 interest • + $1,000 balance • Total payback: $1,576 Consumer Action • Families and Credit Cards • American Express

  13. Pay more than the minimum • Pay-off time would shrink to 3 years (instead of 9) • $206 in interest (instead of $576) • You’d save $370 • What would happen if you paid an extra $10 more per month ($40 instead of $30) Consumer Action • Families and Credit Cards • American Express

  14. Credit card statement • Please refer to the sample Credit Card Statement Activity Sheet Consumer Action • Families and Credit Cards • American Express

  15. Recipe for good credit • Damaged credit record can affect whether you get loans, housing, even a job • Pay the bill on time • Pay more than the minimum • Check for mistakes and dispute errors • Get free credit report: www.annualcreditreport.com Consumer Action • Families and Credit Cards • American Express

  16. Credit card alternatives • Charge cards • Debit cards • Prepaid cards • Secured cards Consumer Action • Families and Credit Cards • American Express

  17. Strategies for parents • Brainstorm how best to help parents reach kids with smart credit card strategies Consumer Action • Families and Credit Cards • American Express

  18. Questions and answers • Do you have any questions about the training? Consumer Action • Families and Credit Cards • American Express

  19. Thanks for participating! Consumer Action • Families and Credit Cards • American Express