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Families and Credit Cards A project of Consumer Action and American Express 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

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families and credit cards

FamiliesandCredit Cards

A project of Consumer Action and American Express

Consumer Action • Families and Credit Cards • American Express

youth and credit cards
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

what would kids need a credit card for
What would kids need a credit card for?
  • Emergencies
  • Field trips and other travel
  • Shopping

Consumer Action • Families and Credit Cards • American Express

credit yesteryear activity
Credit Yesteryear Activity
  • What was credit used for in your house growing up?

Consumer Action • Families and Credit Cards • American Express

credit card eligibility
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

authorized users
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

take a loan exercise
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

discussing credit cards with your children
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

credit and spending management tools
Credit and spending management tools
  • Online access
  • Statements
  • Alerts
  • Financial calculators

Consumer Action • Families and Credit Cards • American Express

minimum payment example
Minimum payment example
  • Balance: $1,000
  • Interest Rate: 15%
  • Minimum Payment 3% ($30)

Consumer Action • Families and Credit Cards • American Express

do you know
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

do you know12
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

pay more than the minimum
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

credit card statement
Credit card statement
  • Please refer to the sample Credit Card Statement Activity Sheet

Consumer Action • Families and Credit Cards • American Express

recipe for good credit
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

credit card alternatives
Credit card alternatives
  • Charge cards
  • Debit cards
  • Prepaid cards
  • Secured cards

Consumer Action • Families and Credit Cards • American Express

strategies for parents
Strategies for parents
  • Brainstorm how best to help parents reach kids with smart credit card strategies

Consumer Action • Families and Credit Cards • American Express

questions and answers
Questions and answers
  • Do you have any questions about the training?

Consumer Action • Families and Credit Cards • American Express

thanks for participating

Thanks for participating!

Consumer Action • Families and Credit Cards • American Express