credit card terms apr –annual percentage rate –this is the cost of credit, the interest you pay...
TRANSCRIPT
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Credit Card Terms
• APR– Annual Percentage Rate– This is the cost of credit, the interest
you pay to the credit card people.
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Credit Card Terms
• Annual Fee– Annual charge for using the card– This is a fee that some cards have.
Most good credit cards have no annual fee.
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Credit Card Terms
• Balance– How much you owe on the credit card– As in, “What is the balance on your
credit card?”– Financially smart people never carry
any balance on their credit cards.
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Credit Card Terms
• Introductory Rate– Low APR used to get you to sign up.– Also encourages balance transfers,
usage.
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Credit Card Terms
• Late Fee– Charge for missing payments.– A charge anywhere from $10 - $30
will be added for not paying at least a certain amount by the due date.
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Credit Card Terms
• Good and Bad Credit– Simply put,
Missing or Late Payments = Bad Credit, On Time Payments = Good Credit
– Well talk about why we should care about our credit a little later.
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Credit Card Terms
• Credit Report– A report card on your payment history– It goes back a long way!
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Grace Period
• The time you have to make a payment before interest fees are added.
• Financially smart people pay off the entire balance of their credit cards within the grace period.
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Check out my newentertainment center!
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HOW MUCH DO THEY REALLY COST?
1 $ 2,865.00 717.00 $ 582.00
5 $ 2,383.00 3,275.00 $2,658.00
10 $ 1,893.00 5,876.00 $4,769.00
15 $ 1,504.00 7,943.00 $6,446 .00
YEAR BALANCE TOTAL PAID TOTAL PAID in INTEREST
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HOW MUCH DO THEY REALLY COST?
20 $ 1,194.00 9,584.00 $7,779.00
25 $ 949.00 10,888.00 $8,837.00
30 $ 754.00 11,924.00 $9,678.00
35 $ 491.00 12,825.00 $10,316.00 39 $ - 13,583.00 $10,583.00
HOLY MOLY! IT TAKES 39 YEARS AND COSTS $13,583 to
pay back $3,000!
YEAR BALANCE TOTAL PAID TOTAL PAID in INTEREST
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BY THE TIME I AM DONE
PAYING FOR MY
STEREO, I AM AN
OLD MAN!
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BY THE TIME I AM DONE
PAYING FOR MY
STEREO, I AM AN
OLD MAN!
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TAKE THE CREDIT PLEDGE WITH ME
NOW.
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THE REAL COST OF BAD CREDIT?
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CAR with Good Credit
• 8.75% APR on Car Loan• $290/Month Payment for a
$12,000 car.• Total Paid on car is about $14,000
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CAR with Bad Credit
• 14.75% APR on Car Loan• $335/Month Payment for the same
car• Total Paid on car is about $16,000
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HOUSE with Good Credit
• 6.75% APR on Mortgage• $1,100/Month Payment for a
$150,000 home.• Total Paid on House is about
$350,000
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HOUSE with Bad Credit
• 12.75% APR on Mortgage• $1,800/Month Payment for the
same house• Total Paid on House is about
$590,000
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OTHER COSTS
Not getting the loan in the first place
Extra fees.Larger down payment required
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CREDIT CARD COMMANDMENTS
• Make payments within the grace period. Do not procrastinate!
• Do not carry a balance at all!
• Use a no-annual fee card
• If you get into trouble, contact the card issuer before problem occurs.
• Budget!
• Report any changes immediately.(Address, etc)