credit 101: do you pass the test? brought to you by [insert cu name here]
TRANSCRIPT
![Page 1: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/1.jpg)
Credit 101: Credit 101: Do You Pass the Test?Do You Pass the Test?
Brought to you by[Insert CU name here]
![Page 2: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/2.jpg)
ObjectivesObjectives
Learn:• Why you should care about credit• What the credit CARD Act of 2009 means for you• Tips for using credit wisely … for life• How to build a solid credit history• What to do if you lose your
credit card
![Page 3: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/3.jpg)
Why should you care?Why should you care?
“How Undergraduate Students Use Credit Cards,” Sallie Mae, 2009.
% o
f co
lleg
e st
ud
ents
0 -
50 -
100 -
Have credit
0 50 100
2004
2008
% of college students with$0 credit card balance
Used credit for
College stuff
![Page 4: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/4.jpg)
Case StudyCase Study
Meet Joe:
• 21 years-old
• Checking account at hometown bank
• No savings account
• Utility bills are in roommates’ names
• Late rent payments twice last semester
• Gas credit card in parents’ name (maxed
out @ $800)
• Receives 3-4 credit card offers/week
• Turned down for personal loan
Joe
![Page 5: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/5.jpg)
It’s not easy being me …It’s not easy being me …
![Page 6: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/6.jpg)
How does CARD Act protect you?How does CARD Act protect you?
Cosigner may be required
No unsolicited hike in credit limit
No more T-shirts
Opt-in required to get offers
45-day notice required prior to rate increase
Payments to high-cost debt first
$$$$$$
![Page 7: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/7.jpg)
How does your credit history How does your credit history affect you now, and later?affect you now, and later?
Getting an apartment
Getting insuranceand how much you payObtaining loans/mortgage
and at what interest rate
Landing a job
![Page 8: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/8.jpg)
How do you “find” credit?How do you “find” credit?
Shop around• Compare terms• Understand all fees
Caution:• Low introductory rates• Rewards programs
![Page 9: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/9.jpg)
What should you watch out for?What should you watch out for?
Fine print• Fee if you always pay in full• Rate increases• Late payment fee• Balance-transfer fee• Over-the-limit fee• Replacement-card fee• Cash advance fee
![Page 10: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/10.jpg)
What else should you watch out for?What else should you watch out for?
• Grace period
• Universal default clause
• 120 days same as cash
• Minimum payment trap
![Page 11: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/11.jpg)
What does the minimum What does the minimum payment trap actually cost you?payment trap actually cost you?
Amount Payment Pay-off Interest Actual
owed option period costs cost
$2,000 Minimum 9.5 years $1,116 $3,1164% of declining balance ($80 to start)
$2,000 $100 2 years $396 $2,396 per month (savings
of $720!)
Interest rate: 18%From the Googolplex Credit Card Interest-Saving Calculator
![Page 12: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/12.jpg)
What’s the What’s the rightright way way to use a credit card? to use a credit card?
Hints:
• Charge how much?
• Think “credit limit”
![Page 13: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/13.jpg)
What’s What’s youryour credit score? credit score?
Are you adding debt? (10%)
Do you have a “healthy mix” of credit? (10%)
How long is your credit history? (15%)?
Do you owe a lot of money to a lot of people? (30%)
Do you pay bills on time? (35% of total score)
![Page 14: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/14.jpg)
How to avoid credit card troubleHow to avoid credit card trouble
??
![Page 15: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/15.jpg)
What happens when you pay late?What happens when you pay late?
• Late payment fee– Now, only one fee for single late payment– Now, not more than $25 (exceptions…)– Now, can’t be > minimum payment
• Lower credit score
• Higher rates by other issuers
![Page 16: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/16.jpg)
How can you avoid making How can you avoid making late payments?late payments?
Easy to remember due date
Auto bill-pay
Online banking
Fee waiver request
![Page 17: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/17.jpg)
Are you taking on too much debt?Are you taking on too much debt?
Know the warning signs!
![Page 18: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/18.jpg)
What should you do if you What should you do if you can’t pay your bills?can’t pay your bills?
• Contact creditors
• Contact CCCS (800-388-2227)
• Steer clear of “credit repair”
• Don’t add new debt
![Page 19: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/19.jpg)
How can you establish—and build—How can you establish—and build—a good credit history?a good credit history?
• Open checking account
• Request retail/credit card, or gas card
• Open secured credit card account
• Pay bills on time
• Obtain small loan
• Have “mix” of credit over time
![Page 20: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/20.jpg)
““OMG—I can’t find my credit card! OMG—I can’t find my credit card! What do I do?”What do I do?”
• Who to call…
• When to call…
• What’s my liability…
• Where not to keep phone numbers…
![Page 21: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/21.jpg)
Online ResourcesOnline Resources
Blogs
Credit reporting agencies
Government agencies
Industry
![Page 22: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/22.jpg)
Case Study: Case Study: Now Now youyou make the call! make the call!
1. Top priorities
2. Credit-building strategies
3. Future benefits from good credit
4. Potential pitfalls
5. Resources available
![Page 23: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/23.jpg)
Remember … your credit union can help you with all your financial challenges.
![Page 24: Credit 101: Do You Pass the Test? Brought to you by [Insert CU name here]](https://reader037.vdocuments.mx/reader037/viewer/2022110209/56649e155503460f94b001ee/html5/thumbnails/24.jpg)
© 2010 Credit Union National Association Inc., the trade association for credit unions in the U.S.
To order additional To order additional “Credit Union Seminars in a Box” topics:“Credit Union Seminars in a Box” topics:
Call 800-356-8010, press 3Call 800-356-8010, press 3
For a list of available topics,visit cuna.org and type “Member seminar kits”
in search box.