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Jenny charged $2,500 to her credit card during her first month with an APR of 19.8%. By only making minimum payments of $50 per month, it will take her 8 years and 9 months to pay off the balance, costing her $2,825.18 in interest charges over the life of the loan. Credit cards can be convenient but also carry risks like high interest fees if not paid off in full each month. Both positive and negative credit card use impacts an individual's credit history and credit score over time.

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Unders tanding Your Credit Card Credit Unit tC ard Take Charge of Your Finances Cr edi
Something to think About Twenty-one year old Jenny felt rich when she received her first credit card during her junior year of college. She charged $2,500, her credit limit, the first month. Every month after that, she was careful about paying on time, but only sent in the minimum monthly payment, $50.00. With an interest rate of 19.8%, even though she never charged another item, it will take her 8 years and 9 months to pay off her account. When her account has a zero balance, she will have paid a total of $5,325.18. Therefore, she will have paid $2,825.18 in interest.
ard t C ard edi t C Cr edi Credit Cr CREDIT- When goods, services or money is received in exchange for a promise to pay a definite sum of money at a future date INTEREST The price of - money- when referring to credit, interest is the charge for borrowing money
ard t C ard edi t C Cr edi r Lender and Borrower C LENDER- BORROWER- The person or organization The person or who has the resources to organization that is provide the individual with a receiving the money from loan the lender
Cr edi t C Cr edi ard t C ard Closed-end vs. Open-end Credit Open-end Characteristics Closed-end credit (revolving) credit Credit extended in Definition A one-time loan advance May be used for a variety Purpose of loan Specified in application of purposes
Cr edi t C Cr edi ard t C ard Closed-end vs. Open-end Credit Closed-end Characteristics Open-end credit credit Varies- can be paid in one Specified number of Payments payment or a series of equal payments equal or unequal payments Agreed upon during the May be increased for Loan Amount application process responsible consumers Mortgage, automobile, Examples Credit cards education loans
ard t C ard edi t C Cr edi Credit Card Cr What is a credit card? Pre-approved credit which can be used for the purchase of goods and services now and payment of them later A credit cards credit limit varies based upon an individual’s perceived creditworthiness Credit limit is the Creditwor thiness is an maximum dollar individuals ability and willingness amount loaned to pay the money back
ard Cr edi Cr t C ard edi t C Credit Card Interest Interest is charged each month the balance is not paid in full Rate at which interest is charged is referred to as: Annual Percentage Rate (APR) The cost of credit expressed as a yearly interest rate
ard t C ard edi t C Cr edi Minimum Payments Cr • Required to make at least a minimum payment each month – Usually only a small percentage (2.5-5%) of the total balance due • Cardholders who only make the minimum payment: – Make slow progress paying off card balance – Pay substantially more than what was initially charged to the card
ard t C ard edi t C Cr edi Minimum Payments Cr Amount Total charged to Time to Total Minimum amount credit card APR pay off the amount payment paid in in one credit card paid interest purchase $2,000 18% $50.00 62 months $1,077.25 $3,077.25 $500 12% $25.00 23 months $60.67 $560.67
ard t C ard edi t C Cr edi Using a Credit Card Cr Advantages Disadvantages
ard t C ard edi t C Cr edi Cr Advantages to using Credit Cards Advantages Convenient payment tool Protection against fraud Opportunity to establish a Useful for emergencies positive credit history Online shopping is safer than using a Often required to hold a reservation debit card because of the Fair Credit Billing Act protection Able to purchase “big ticket” items Possibility of receiving bonuses, such and spread out payments as frequent flyer miles or cash rebates
ard t C ard edi t C Cr edi Cr Disadvantages to using Credit Cards Disadvantages Interest can be costly when Responsible for lost/stolen cards a balance is revolved Additional penalty fees Applying for multiple accounts can may apply lower your credit score Tempting to overspend Risk of identity theft
ard t C ard edi t C Cr edi Debit Cards Cr • W hat is a debit card? – A plastic card which looks like a credit card, but is electronically connected to the cardholder’s bank account – Money is immediately withdrawn from the cardholders checking account What is the difference between a credit card and a debit card?
ard t C ard edi t C Cr edi Credit History Cr Credit cards can have a positive or negative impact on an individuals credit history Credit Report A record of a consumer’s credit history that includes information about credit card use as well as the use of other types of credit, such as auto loans, student loans and mortgage loans Credit Score A number that summarizes an individual’s credit record and history. It is a numeric “grade” of a consumer’s financial reliability
ard Cr edi Cr t C ard edi t C Positive Credit Card use Helps develop Proper credit positive credit Earn a high history and credit card use credit score report A high credit score gives the consumer the opportunity to have lower interest rates on loans, the privilege to use different forms of credit, and an easier approval process for future credit
ard Cr edi Cr t C ard edi t C Positive Credit Card Use • Examples of positive credit card behaviors? – Paying credit card balances in full every month – Paying credit card bills on time – Applying for only credit cards that are needed – Keeping track of all charges by keeping receipts and using a check register – Checking the monthly credit card statement for errors
ard Cr edi Cr t C ard edi t C Negative Credit Card Use Develops Improper negative credit Lower credit history and credit credit card use score report Consumers with low credit scores have difficulty getting loans, difficulty renting apartments, pay higher interest rates, pay higher insurance rates, and have difficulty obtaining a job
ard Cr edi Cr t C ard edi t C Negative Credit Card use • Examples of negative credit card behaviors? – Making late credit card payments – Paying only the minimum payment – Exceeding the card’s credit limit (usually triggers a penalty fee) – Charging items that can’t be paid off immediately – Owning too many credit cards
ard t C ard edi t C Cr edi NO Credit Cr • If an individual has not used credit, they will not have any information in their credit report • Not having a credit report can cause an individual to be denied credit
ard t C ard edi t C Cr edi Credit Card Offers Cr Credit card issuers are required to disclose the terms and fees of credit cards in an easy to read box format This is called the Schumer box
ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. Annual Percentage Rate H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any (APR) for Purchases Paying I nter est on Pu rchases Minimum I nter est interest on purchases if you pay your entire balance by the due date each month. If you are charged interest, the charge will be no less than $1.50. This section discloses the Charge For Credit Card Tips fr om the To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard interest paid for purchases on Feder al Res erv e Boar d Fees the card. Multiple interest rates Set -up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. may be listed here, because the •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) final interest rate may depend Trans action Fees •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) on the creditworthiness of the • • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Tr ans action: 2% of each transaction in U.S. dollars applicant Penalt y Fees • • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
Introductory Rate Interest Rates and Interest Charges If the credit card has an Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. introductory rate it will be AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% shown in this section, which is Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: the APR charged during the 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. credit card's introductory period H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. after a credit card account is H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases opened. The card will have a Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website different APR after the Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar d introductory period ends Set -up and Maintenance Fees Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. What is the introductory rate for •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) this credit card offer? •Addit ional Card Fee: $5 annually (if applicable) Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is The introductory rate depends • greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is on the creditworthiness of the • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars applicant, but it will be Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 12.99%, 13.99%, or 14.99% • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
Variable-rate APR Some cards will have a Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. variable-rate APR , which is Rate (AP R) for Pu rchases After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. AP R for Balance 15.99% an APR that may change Trans fers AP R for Cash •This APR will vary with the market based on the Prime Rate 21.99% Adv ances •This APR will vary with the market based on the Prime Rate depending on other factors, such Penalt y AP R and When it Applies 28.99% This APR may be applied to your account if you: 1.Make a late payment; as the prime rate. The prime 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. rate is an index that represents H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any the interest rate most banks Paying I nter est on Pu rchases interest on purchases if you pay your entire balance by the due date each month. Minimum I nter est If you are charged interest, the charge will be no less than $1.50. charge their most credit-worthy Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard customers Feder al Res erv e Boar d Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your What is the APR for Purchases for Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. this credit card offer? •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) 14.99% Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is Is this a variable-rate APR • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars or a fixed-rate APR? Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 Variable-rate APR • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. APR for Balance Transfers AP R for Balance Trans fers 15.99% •This APR will vary with the market based on the Prime Rate This section discloses the interest AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% paid for balance transfers , When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or which is the act of transferring 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. debt from one credit card account H ow to Av oid Paying I nter est on Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Pu rchases to another. Balance transfer fees Minimum I nter est Charge If you are charged interest, the charge will be no less than $1.50. may apply, even if the balance For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar d transfer APR is 0% Set -up and Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 What is the APR for balance •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) transfers for this credit card offer? Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is 15.99% • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. APR for Cash Advances H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. This section discloses the interest H ow to Av oid Paying I nter est on Pu rchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. paid for cash advances, such as Minimum I nter est Charge For Credit Card If you are charged interest, the charge will be no less than $1.50. To learn more about factors to consider when applying for or using a credit card, visit the website withdrawing cash from an ATM Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar d using a credit card. Cash advance Set -up and Maintenance Fees Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are fees may also apply assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) Trans action Fees •Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater What is the APR for cash advances •Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater •Foreign Tr ans action: 2% of each transaction in U.S. dollars for this credit card offer? Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 21.99% • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
Penalty APR and Annu al Per centage Interest Rates and Interest Charges 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. When it Applies Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% •This APR will vary with the market based on the Prime Rate This section discloses the penalty Trans fers AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate APR, as well as the penalty terms Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; that trigger the penalty APR to 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these take effect H ow to Av oid reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases •Penalty APR is the interest Minimum I nter est Charge For Credit Card If you are charged interest, the charge will be no less than $1.50. To learn more about factors to consider when applying for or using a credit card, visit the website rate charged on new transactions Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar d if the penalty terms in the credit Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are card contract are triggered assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is What is the Penalty APR for this • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars credit card offer? Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 21.99% • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. How To Avoid Paying H ow to Av oid H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Interest on Purchases Paying I nter est on Pu rchases Minimum I nter est interest on purchases if you pay your entire balance by the due date each month. If you are charged interest, the charge will be no less than $1.50. This section explains how you Charge For Credit Card Tips fr om the To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard can avoid interest charges on a Feder al Res erv e Boar d Fees credit card Set -up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) How can a cardholder avoid paying •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) interest on a credit card? Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is By paying credit card bills • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is in full by the due date • more than $1000 Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: Minimum Interest 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or Charge 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. Credit card companies often H ow to Av oid Paying I nter est on Pu rchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. have a minimum interest Minimum I nter est Charge For Credit Card If you are charged interest, the charge will be no less than $1.50. To learn more about factors to consider when applying for or using a credit card, visit the website amount. These charges Tips fr om the Feder al Res erv e Boar d of the Federal Reserve Board at http://www.federalreserve.gov/creditcard typically range from $0.50 to Set -up and Maintenance Fees Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are $2 per month and are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) disclosed in this section of the Trans action Fees •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is credit card offer • greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 What is the minimum interest charge • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” for this credit card? * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill $1.50
ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. For Credit Card Tips H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any from the Federal Reserve Paying I nter est on Pu rchases interest on purchases if you pay your entire balance by the due date each month. Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Board Charge For Credit Card Tips fr om the To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard This section directs Feder al Res erv e Boar d Fees consumers to the Federal Set -up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. Reserve website to obtain •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) more information about credit Trans action Fees •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) cards • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
Set-up and Maintenance Fees Annu al Per centage Rate (AP R) for Interest Rates and Interest Charges 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market This section discloses any set- Pu rchases AP R for Balance Trans fers based on the Prime Rate. 15.99% •This APR will vary with the market based on the Prime Rate up and maintenance fees for AP R for Cash Adv ances Penalt y AP R and 21.99% •This APR will vary with the market based on the Prime Rate 28.99% the card, which can include When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; annual fees, account set-up 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these fees, participation fees, and reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. additional card fees Pu rchases Minimum I nter est Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard •Annual fee is a yearly fee Feder al Res erv e Boar d Fees that may be charged for Set -up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. having a credit card •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) What is the annual fee • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars for this credit card? Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 $20 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; Transcation Fees 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. This section discloses any H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. transaction fees for the card, H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases which can include balance Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard transfer fees, cash advance Feder al Res erv e Boar d fees, and foreign transaction Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are fees assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) What is the fee for cash Trans action Fees •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is advances for this card? • greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater $5 or 3% of the Penalt y Fees • • Foreign Tr ans action: 2% of each transaction in U.S. dollars L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is amount of each cash • • more than $1000 Ov er- the- limit: $29 R etur ned Payment: $35 advance (whichever is * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 greater) days late in paying your bill
Penalty Fees This section discloses the Annu al Per centage Interest Rates and Interest Charges 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. penalty fees for the card, Rate (AP R) for Pu rchases AP R for Balance After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. 15.99% which can include late- Trans fers AP R for Cash Adv ances •This APR will vary with the market based on the Prime Rate 21.99% •This APR will vary with the market based on the Prime Rate payment, over-the-limit, and Penalt y AP R and When it Applies 28.99% This APR may be applied to your account if you: 1.Make a late payment; returned payment fees 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these •Late payment fee is reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. charged when a cardholder Pu rchases Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge does not make the minimum For Credit Card Tips fr om the Feder al Res erv e To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard monthly payment by the due Boar d Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your date Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Over-the-limit fee is •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) charged if the account balance Trans action Fees • • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is goes over the set credit limit greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” Does this card have an * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill over-the limit fee? Yes, the over-the-limit fee is
ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: How we calculate your 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. balance H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. Credit card companies can use H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases one of several methods to Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website calculate the outstanding Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar d balance on a credit card. The Set -up and Maintenance Fees Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are method used is disclosed in assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) this section Trans action Fees •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars What method is used to calculate the Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 balance on this card? • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” Average daily balance * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill (including new purchases)
Interest Rates and Interest Charges Loss of Introductory Annu al Per centage Rate (AP R) for Pu rchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR AP R for Balance Trans fers AP R for Cash 15.99% •This APR will vary with the market based on the Prime Rate 21.99% If the card has an introductory Adv ances Penalt y AP R and When it Applies •This APR will vary with the market based on the Prime Rate 28.99% This APR may be applied to your account if you: rate, this area will list how the 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or lower introductory rate can be 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. lost H ow to Av oid Paying I nter est on Pu rchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge How can the introductory APR be For Credit Card Tips fr om the To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e lost on this card? Boar d Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your If the cardholder is more Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. than 60 days late in paying •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) the bill •Addit ional Card Fee: $5 annually (if applicable) What APR will the cardholder Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is be charged if the introductory • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars rate is lost? Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 The Penalty APR of • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 28.99% days late in paying your bill
ard t C ard edi t C Cr edi r Credit Card Benefits C • Research benefits that may be received from the card – Cash rebates – Warranties for items purchased with the card – Travel accident insurance – Frequent flyer miles • Make sure to know all terms and conditions of card benefits • Cards that offer benefits may charge fees or higher interest rates
ard Cr edi Cr t C ard edi t C Receiving a Credit Card 1. Compare credit card offers and determine which card to apply for 2. Complete a credit application – A form requesting information about a person’s ability to repay and the applicant’s age – Can be completed through the mail, the internet or over the phone
ard Cr edi Cr t C ard edi t C Receiving a Credit Card 3. Lenders conduct a credit investigation – A comparison of information on credit application to information on a credit report 4. Applicants may or may not be approved for the card they apply for – Approval depends on the applicant's credit history
ard Cr edi Cr t C ard edi t C Pre-Approved Credit Card Applications • Credit card companies send pre-approved credit card applications in the mail – If an individual is pre-approved for that particular card, they have passed the initial credit check Let’s do some comparison shopping…
ard Cr edi Cr t C ard edi t C Credit Card Statements • Credit card statements outline important information about the card • The 2009 CARD Act required credit card companies to include specific information about a card account in the statement Andrew’s Credit Card Statement Please help Andrew interpret his credit card statement.
Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you Summary of Account Cash Advances Past Due Amount Fees Charged 1 +318.00 +0.00 +69.45 4 may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment War ning : If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charged +10.89 Activity New Balance   Credit Limit $1,784.53 $2,000.00     If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… This section includes payments, Available credit Statement closing date Days in billing cycle $215.47 3/22/2012 30 Only the minimum payment $62 10 years 3 years $3,284 $2,232 credits, purchases, balance Notice of Changes to Y our I nter est Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: 5 Important Changes to You r Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed 6 transfers, cash advances, fees, Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR with this statement. These changes will impact your account as follows: will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases Transactions made before 4/9/12: Current rates will continue to apply to will increase to 16.99%. interest charges, amounts past these transactions. If you become more than 60 days late on your account, Transactions made before 4/9/12: Current APRs will continue to apply to the Penalty APR will apply to hose transactions as well. these transactions. Transactions 7 due, the new balance, available Reference Number XXXX1 Trans Date 2/22 Post Date 2/23 Description of Transaction or Credit Store #1 Amount $529.57 credit, and the last day of the XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees billing period XXXX5 XXXX6 2/23 2/27 2/23 2/27 Late Fee Balance Transfer Fee $35.00 $23.55 XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 Interest Charged       Interest Charge on Purchases $6.31 How much did Andrew charge in       Interest Charge on Cash Advances $4.58       Total Interest for this Period $10.89 2012 Totals Year-to-Date new purchases during this credit card Total fees charged in 2012 Total interest charged in 2012 $90.14 $18.27 9 billing cycle? I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 $529.57 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay Payment Information Fees Charged Interest Charged New Balance +69.45 +10.89 $1,784.53 4 more in interest and it will take you longer to pay off your balance. For example…   If you make no additional You will pay off the balance And you will end up charges using this card and shown on this statement in paying an estimated total This section includes the total     each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum 10 years $3,284 Statement closing date 3/22/2012 payment new balance, the minimum Days in billing cycle 30 $62 3 years $2,232 Notice of Changes to Y our I nter est Rates 5 Important Changes to You r Account Terms 6 payment amount, and the date You have triggered the Penalty APR of 28.99%. This change will impact The following is a summary of changes that are being made to your account your account as follows: terms. For more detailed information, please refer to the booklet enclosed Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR with this statement. These changes will impact your account as follows: will apply to these transactions. We may keep the APR at this level payment is due indefinitely. Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases Transactions made before 4/9/12: Current rates will continue to apply to will increase to 16.99%. these transactions. If you become more than 60 days late on your account, Transactions made before 4/9/12: Current APRs will continue to apply to the Penalty APR will apply to hose transactions as well. these transactions. Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees What is Andrew’s minimum payment XXXX5 XXXX6 2/23 2/27 2/23 2/27 Late Fee Balance Transfer Fee $35.00 $23.55 due for this billing cycle? XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 Interest Charged       Interest Charge on Purchases $6.31       Interest Charge on Cash Advances $4.58       Total Interest for this Period $10.89 $53.00 Total fees charged in 2012 2012 Totals Year-to-Date $90.14 9 Total interest charged in 2012 $18.27 I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay 4 more in interest and it will take you longer to pay off your balance. For example… Late Payment Warning Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53   If you make no additional charges using this card and You will pay off the balance shown on this statement in And you will end up paying an estimated total     This section states any each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum 10 years $3,284 Statement closing date 3/22/2012 payment $62 3 years $2,232 additional fees and the higher Days in billing cycle 30 Notice of Changes to Y our I nter est Rates You have triggered the Penalty APR of 28.99%. This change will impact 5 Important Changes to You r Account Terms The following is a summary of changes that are being made to your account 6 interest rate that may be charged your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases if a payment is late Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 How much is Andrew’s XXXX4 3/15 3/17 Balance Transfer Fees $785.00 XXXX5 2/23 2/23 Late Fee $35.00 late payment fee? XXXX6 XXXX7 2/27 2/28 2/27 2/28 Balance Transfer Fee Cash Advance Fee 8 $23.55 $10.90       Total Fees for this Period $69.45 $35             Interest Charged Interest Charge on Purchases Interest Charge on Cash Advances $6.31 $4.58       Total Interest for this Period $10.89 2012 Totals Year-to-Date Total fees charged in 2012 Total interest charged in 2012 $90.14 $18.27 9 I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
Minimum Payment Andrew’s Credit Card Statement Warning Summar y of Accou nt Act iv ity Previous Balance Payments 535.07 -450.00 New Balance Minimum Payment Due Payment Information 2 $1784.53 $53.00 This section includes an Purchases Balance Transfers +529.57 +785.00 3 Payment Due Date 4/20/12 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 estimate of how long it can take Minimum Payment War ning : If you make only the minimum payment each period, you will pay Fees Charged Interest Charged +69.45 +10.89 4 more in interest and it will take you longer to pay off your balance. For example… New Balance $1,784.53   If you make no additional You will pay off the balance And you will end up to pay off a credit card balance charges using this card and shown on this statement in paying an estimated total     each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum 10 years $3,284 Statement closing date 3/22/2012 payment if only the minimum payment is Days in billing cycle 30 $62 3 years $2,232 Notice of Changes to Y our I nter est Rates 5 Important Changes to You r Account Terms 6 made each month, and an You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: estimate of the total amount indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. paid, including interest, if the Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount bill is paid in three years Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 (assuming no additional charges XXXX4 XXXX5 3/15 2/23 3/17 2/23 Balance Transfer Late Fee Fees $785.00 $35.00 are made) XXXX6 XXXX7   2/27 2/28   2/27 2/28   Balance Transfer Fee Cash Advance Fee Total Fees for this Period 8 $23.55 $10.90 $69.45 Interest Charged       Interest Charge on Purchases $6.31 How long will it take Andrew to pay       Interest Charge on Cash Advances $4.58       Total Interest for this Period $10.89 2012 Totals Year-to-Date off the balance of his credit card if he Total fees charged in 2012 Total interest charged in 2012 $90.14 $18.27 9 only pays the minimum payment? I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% 10 $253.50 $4.58 10 years Balance Transfers 0.00% $637.50 $0.00
Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 3 Notice of Changes to Balance Transfers +785.00 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay Fees Charged +69.45 4 more in interest and it will take you longer to pay off your balance. For example… Your Interest Rates Interest Charged New Balance   +10.89 $1,784.53     If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Credit Limit $2,000.00 If a cardholder triggers the Available credit Statement closing date Days in billing cycle $215.47 3/22/2012 30 Only the minimum payment $62 10 years 3 years $3,284 $2,232 Penalty APR, the credit card Notice of Changes to Y our I nter est Rates You have triggered the Penalty APR of 28.99%. This change will impact 5 Important Changes to You r Account Terms The following is a summary of changes that are being made to your account 6 your account as follows: terms. For more detailed information, please refer to the booklet enclosed issuer must notify them on their Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases Transactions made before 4/9/12: Current rates will continue to apply to statement that their rates will be will increase to 16.99%. these transactions. If you become more than 60 days late on your account, Transactions made before 4/9/12: Current APRs will continue to apply to the Penalty APR will apply to hose transactions as well. these transactions. Transactions 7 increasing Reference Number Trans Date Post Date Description of Transaction or Credit Store #1 Amount $529.57 XXXX1 2/22 2/23 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 Has Andrew triggered XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 the Penalty APR?             Interest Charged Interest Charge on Purchases Interest Charge on Cash Advances $6.31 $4.58       Total Interest for this Period $10.89 Yes, he will pay 28.99% on Total fees charged in 2012 2012 Totals Year-to-Date $90.14 9 all transactions made after Total interest charged in 2012 $18.27 4/9/12. Type of Balance Purchases 14.99% I nter est Charge Calcu lation Annual P ercentage Rate (APR) Balance Subject to Interest Rate $512.14 Interest Charge $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Important Changes to Purchases Balance Transfers +529.57 +785.00 3 Payment Due Date 4/20/12 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Your Account Terms Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay Fees Charged Interest Charged +69.45 +10.89 4 more in interest and it will take you longer to pay off your balance. For example… New Balance $1,784.53   If you make no additional You will pay off the balance And you will end up In this section of the statement, charges using this card and shown on this statement in paying an estimated total     each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum 10 years $3,284 Statement closing date 3/22/2012 payment cardholders must be notified of Days in billing cycle 30 $62 3 years $2,232 Notice of Changes to Y our I nter est Rates 5 Important Changes to You r Account Terms 6 any raise in rates or fees or any You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: other significant changes to the indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. account Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees Other than implementation of the XXXX5 XXXX6 2/23 2/27 2/23 2/27 Late Fee Balance Transfer Fee $35.00 $23.55 Penalty APR, will there be any other XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 Interest Charged changes to Andrew’s account terms?             Interest Charge on Purchases Interest Charge on Cash Advances Total Interest for this Period $6.31 $4.58 $10.89       2012 Totals Year-to-Date Total fees charged in 2012 Total interest charged in 2012 $90.14 $18.27 9 Yes, his APR for Purchases is I nter est Charge Calcu lation increasing to 16.99%. Type of Balance Purchases Annual P ercentage Rate (APR) 14.99% Balance Subject to Interest Rate $512.14 Interest Charge $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
Transactions Andrew’s Credit Card Statement This section includes a list of all Summar y of Accou nt Act iv ity Previous Balance Payments 535.07 -450.00 New Balance Minimum Payment Due Payment Information 2 $1784.53 $53.00 the transactions that have Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay occurred since the last statement Fees Charged Interest Charged New Balance +69.45 +10.89 $1,784.53 4 more in interest and it will take you longer to pay off your balance. For example…   If you make no additional You will pay off the balance And you will end up charges using this card and shown on this statement in paying an estimated total (purchases, payments, credits,     each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum 10 years $3,284 Statement closing date 3/22/2012 payment cash advances, and balance Days in billing cycle 30 $62 3 years $2,232 Notice of Changes to Y our I nter est Rates 5 Important Changes to You r Account Terms 6 transfers). This section should You have triggered the Penalty APR of 28.99%. This change will impact The following is a summary of changes that are being made to your account your account as follows: terms. For more detailed information, please refer to the booklet enclosed Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR with this statement. These changes will impact your account as follows: will apply to these transactions. We may keep the APR at this level be carefully reviewed by the indefinitely. Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases Transactions made before 4/9/12: Current rates will continue to apply to will increase to 16.99%. these transactions. If you become more than 60 days late on your account, Transactions made before 4/9/12: Current APRs will continue to apply to the Penalty APR will apply to hose transactions as well. these transactions. cardholder to ensure there are Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount Number Date no unauthorized charges or XXXX1 XXXX2 XXXX3 2/22 2/25 2/26 2/23 2/26 2/26 Store #1 Payment Cash Advance $529.57 $450.00 - $318.00 errors XXXX4 XXXX5 3/15 2/23 3/17 2/23 Balance Transfer Late Fee Fees $785.00 $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 How much did Andrew charge on             Interest Charged Interest Charge on Purchases Interest Charge on Cash Advances $6.31 $4.58 his credit card to Store #1?       Total Interest for this Period 2012 Totals Year-to-Date $10.89 Total fees charged in 2012 $90.14 9 $529.57 Total interest charged in 2012 $18.27 I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay Fees and Interest Charged Fees Charged Interest Charged New Balance +69.45 +10.89 $1,784.53 4 more in interest and it will take you longer to pay off your balance. For example…   If you make no additional You will pay off the balance And you will end up Credit card issuers must list the charges using this card and shown on this statement in paying an estimated total     each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum 10 years $3,284 Statement closing date 3/22/2012 payment fees and interest charges Days in billing cycle 30 $62 3 years $2,232 Notice of Changes to Y our I nter est Rates 5 Important Changes to You r Account Terms 6 separately on the monthly You have triggered the Penalty APR of 28.99%. This change will impact The following is a summary of changes that are being made to your account your account as follows: terms. For more detailed information, please refer to the booklet enclosed Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR with this statement. These changes will impact your account as follows: will apply to these transactions. We may keep the APR at this level statement. Interest charges must indefinitely. Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases Transactions made before 4/9/12: Current rates will continue to apply to will increase to 16.99%. these transactions. If you become more than 60 days late on your account, Transactions made before 4/9/12: Current APRs will continue to apply to the Penalty APR will apply to hose transactions as well. these transactions. be listed by type of transaction Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 Did Andrew pay a late fee? XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 Interest Charged       Interest Charge on Purchases $6.31 Yes, he paid $35.00 for a late             Interest Charge on Cash Advances Total Interest for this Period $4.58 $10.89 2012 Totals Year-to-Date fee. Total fees charged in 2012 Total interest charged in 2012 $90.14 $18.27 9 I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay Fees Charged +69.45 4 more in interest and it will take you longer to pay off your balance. For example… Year-to-Date Totals Interest Charged New Balance   +10.89 $1,784.53     If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Credit Limit $2,000.00 The total amount paid in fees Available credit Statement closing date Days in billing cycle $215.47 3/22/2012 30 Only the minimum payment $62 10 years 3 years $3,284 $2,232 and interest charges for the Notice of Changes to Y our I nter est Rates You have triggered the Penalty APR of 28.99%. This change will impact 5 Important Changes to You r Account Terms The following is a summary of changes that are being made to your account 6 your account as follows: terms. For more detailed information, please refer to the booklet enclosed current year must be shown on Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases Transactions made before 4/9/12: Current rates will continue to apply to the statement will increase to 16.99%. these transactions. If you become more than 60 days late on your account, Transactions made before 4/9/12: Current APRs will continue to apply to the Penalty APR will apply to hose transactions as well. these transactions. Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 What is the total amount of interest XXXX5 2/23 2/23 Late Fee Fees $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 Andrew has paid in the year 2012? XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 Interest Charged       Interest Charge on Purchases $6.31       Interest Charge on Cash Advances $4.58       Total Interest for this Period $10.89 $18.27 Total fees charged in 2012 2012 Totals Year-to-Date $90.14 9 Total interest charged in 2012 $18.27 I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Interest Charge Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Calculation Past Due Amount Fees Charged Interest Charged +0.00 +69.45 +10.89 4 Minimum Payment War ning : If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… This section includes a summary   New Balance $1,784.53 If you make no additional You will pay off the balance And you will end up charges using this card and shown on this statement in paying an estimated total     each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum of the interest rates on the 10 years $3,284 Statement closing date 3/22/2012 payment Days in billing cycle 30 $62 3 years $2,232 different types of transactions, Notice of Changes to Y our I nter est Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR 5 Important Changes to You r Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: 6 account balances, the amount of will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to each, and the interest charged the Penalty APR will apply to hose transactions as well. Transactions these transactions. 7 for each type of transaction Reference Trans Post Date Description of Transaction or Credit Amount Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 What interest rate is Andrew paying XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 on cash advances?             Interest Charged Interest Charge on Purchases Interest Charge on Cash Advances $6.31 $4.58       Total Interest for this Period $10.89 21.99% Total fees charged in 2012 2012 Totals Year-to-Date $90.14 9 Total interest charged in 2012 $18.27 I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00 Let’s take a look at another credit card statement…
ard Cr edi Cr t C ard edi t C Cardholder Protections & Rights Limits liability for unauthorized credit card charges to $50.00 per card Must write a letter within 60 days of the first bill containing the error If a credit card number is used fraudulently but the card itself was not used, the individual has no personal liability
ard Cr edi Cr t C ard edi t C Cardholder Protections & Rights 2009 CARD Act – To receive a credit card, consumers must be 21 years of age or older • Consumers under 21 have to either have a co-signer or show documentation of sufficient income to make payments • If someone agrees to be a co-signer on an account, they are equally responsible for the loan – Interest rates on existing balances generally can’t be raised unless a cardholder is 60 days or more past due
ard Cr edi Cr t C ard edi t C Cardholder Protections & Rights 2009 CARD Act – Must be notified of any significant changes in rates and fees at least 45 days before the changes take effect • Any changes made to an account can only apply to future transactions (new charges) • Have the option of closing the account before the changes go into effect – Cardholders now have to “opt-in” to allowing transactions that take them over their credit limit
ard Cr edi Cr t C ard edi t C Cardholder Protections & Rights 2009 CARD Act – Credit card issuers are required to send a monthly statement at least 21 days before a credit card payment is due – Credit card payment due dates must be consistent month to month
ard Cr edi Cr t C ard edi t C Cardholder Protections & Rights 2009 CARD Act – Credit card companies cannot increase rates for the first 12 months after an account is open unless: • The card has a variable interest rate • The cardholder is more than 60 days late in paying their bill • The card has an introductory rate (the introductory rate must be in place for at least 6 months and then the rate can increase)
ard Cr edi Cr t C ard edi t C Cardholder Protections & Rights 2009 CARD Act – Some set-up and maintenance fees are charged before the card is used – This may reduce the amount of credit initially available • These non-penalty fees cannot exceed 25% of the initial credit limit • For example, if a card has a credit limit of $1,000 the total fees for the first year (not including penalty fees) cannot exceed $250
ard Cr edi Cr t C ard edi t C Credit Card Safety Tips Do not leave cards Close unwanted Sign card with a lying around, and accounts by writing signature and “Please report lost or stolen and phone, then cut see ID” cards promptly up the card Do not give out Keep a list of all cards, Shred all pre-approved account numbers account numbers, and credit card offers, phone lists separate from unless making a cards applications, or purchase solicitations
ard t C ard edi t C Cr edi r Fair Credit Billing Act C • Helps to protect consumers while using a credit card to make purchases • Allows the consumer to not pay for a product or service for which the consumer has a complaint • If products are not delivered or if it is not what the consumer requested, any amount of money that was credited to the card above the $50.00 fee that consumers are responsible for will be issued back • Debit cards do not have the same protection
ard t C ard edi t C Cr edi Summary Cr A credit card is pre-approved credit which can be used for the purchase of goods and services now and payment of them later To avoid paying interest on a credit card, pay the balance in full every month A credit card can have a positive or a negative impact on an individual’s credit history
ard t C ard edi t C Cr edi Summary Cr Credit card companies are required to disclose the terms and fees of a credit card in the Schumer’s box Credit card statements outline important information about a credit card and should be checked carefully for errors Consumers have many protections and rights in regards to credit card use

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Credit card basics

  • 1. Unders tanding Your Credit Card Credit Unit tC ard Take Charge of Your Finances Cr edi
  • 2. Something to think About Twenty-one year old Jenny felt rich when she received her first credit card during her junior year of college. She charged $2,500, her credit limit, the first month. Every month after that, she was careful about paying on time, but only sent in the minimum monthly payment, $50.00. With an interest rate of 19.8%, even though she never charged another item, it will take her 8 years and 9 months to pay off her account. When her account has a zero balance, she will have paid a total of $5,325.18. Therefore, she will have paid $2,825.18 in interest.
  • 3. ard t C ard edi t C Cr edi Credit Cr CREDIT- When goods, services or money is received in exchange for a promise to pay a definite sum of money at a future date INTEREST The price of - money- when referring to credit, interest is the charge for borrowing money
  • 4. ard t C ard edi t C Cr edi r Lender and Borrower C LENDER- BORROWER- The person or organization The person or who has the resources to organization that is provide the individual with a receiving the money from loan the lender
  • 5. Cr edi t C Cr edi ard t C ard Closed-end vs. Open-end Credit Open-end Characteristics Closed-end credit (revolving) credit Credit extended in Definition A one-time loan advance May be used for a variety Purpose of loan Specified in application of purposes
  • 6. Cr edi t C Cr edi ard t C ard Closed-end vs. Open-end Credit Closed-end Characteristics Open-end credit credit Varies- can be paid in one Specified number of Payments payment or a series of equal payments equal or unequal payments Agreed upon during the May be increased for Loan Amount application process responsible consumers Mortgage, automobile, Examples Credit cards education loans
  • 7. ard t C ard edi t C Cr edi Credit Card Cr What is a credit card? Pre-approved credit which can be used for the purchase of goods and services now and payment of them later A credit cards credit limit varies based upon an individual’s perceived creditworthiness Credit limit is the Creditwor thiness is an maximum dollar individuals ability and willingness amount loaned to pay the money back
  • 8. ard Cr edi Cr t C ard edi t C Credit Card Interest Interest is charged each month the balance is not paid in full Rate at which interest is charged is referred to as: Annual Percentage Rate (APR) The cost of credit expressed as a yearly interest rate
  • 9. ard t C ard edi t C Cr edi Minimum Payments Cr • Required to make at least a minimum payment each month – Usually only a small percentage (2.5-5%) of the total balance due • Cardholders who only make the minimum payment: – Make slow progress paying off card balance – Pay substantially more than what was initially charged to the card
  • 10. ard t C ard edi t C Cr edi Minimum Payments Cr Amount Total charged to Time to Total Minimum amount credit card APR pay off the amount payment paid in in one credit card paid interest purchase $2,000 18% $50.00 62 months $1,077.25 $3,077.25 $500 12% $25.00 23 months $60.67 $560.67
  • 11. ard t C ard edi t C Cr edi Using a Credit Card Cr Advantages Disadvantages
  • 12. ard t C ard edi t C Cr edi Cr Advantages to using Credit Cards Advantages Convenient payment tool Protection against fraud Opportunity to establish a Useful for emergencies positive credit history Online shopping is safer than using a Often required to hold a reservation debit card because of the Fair Credit Billing Act protection Able to purchase “big ticket” items Possibility of receiving bonuses, such and spread out payments as frequent flyer miles or cash rebates
  • 13. ard t C ard edi t C Cr edi Cr Disadvantages to using Credit Cards Disadvantages Interest can be costly when Responsible for lost/stolen cards a balance is revolved Additional penalty fees Applying for multiple accounts can may apply lower your credit score Tempting to overspend Risk of identity theft
  • 14. ard t C ard edi t C Cr edi Debit Cards Cr • W hat is a debit card? – A plastic card which looks like a credit card, but is electronically connected to the cardholder’s bank account – Money is immediately withdrawn from the cardholders checking account What is the difference between a credit card and a debit card?
  • 15. ard t C ard edi t C Cr edi Credit History Cr Credit cards can have a positive or negative impact on an individuals credit history Credit Report A record of a consumer’s credit history that includes information about credit card use as well as the use of other types of credit, such as auto loans, student loans and mortgage loans Credit Score A number that summarizes an individual’s credit record and history. It is a numeric “grade” of a consumer’s financial reliability
  • 16. ard Cr edi Cr t C ard edi t C Positive Credit Card use Helps develop Proper credit positive credit Earn a high history and credit card use credit score report A high credit score gives the consumer the opportunity to have lower interest rates on loans, the privilege to use different forms of credit, and an easier approval process for future credit
  • 17. ard Cr edi Cr t C ard edi t C Positive Credit Card Use • Examples of positive credit card behaviors? – Paying credit card balances in full every month – Paying credit card bills on time – Applying for only credit cards that are needed – Keeping track of all charges by keeping receipts and using a check register – Checking the monthly credit card statement for errors
  • 18. ard Cr edi Cr t C ard edi t C Negative Credit Card Use Develops Improper negative credit Lower credit history and credit credit card use score report Consumers with low credit scores have difficulty getting loans, difficulty renting apartments, pay higher interest rates, pay higher insurance rates, and have difficulty obtaining a job
  • 19. ard Cr edi Cr t C ard edi t C Negative Credit Card use • Examples of negative credit card behaviors? – Making late credit card payments – Paying only the minimum payment – Exceeding the card’s credit limit (usually triggers a penalty fee) – Charging items that can’t be paid off immediately – Owning too many credit cards
  • 20. ard t C ard edi t C Cr edi NO Credit Cr • If an individual has not used credit, they will not have any information in their credit report • Not having a credit report can cause an individual to be denied credit
  • 21. ard t C ard edi t C Cr edi Credit Card Offers Cr Credit card issuers are required to disclose the terms and fees of credit cards in an easy to read box format This is called the Schumer box
  • 22. ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. Annual Percentage Rate H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any (APR) for Purchases Paying I nter est on Pu rchases Minimum I nter est interest on purchases if you pay your entire balance by the due date each month. If you are charged interest, the charge will be no less than $1.50. This section discloses the Charge For Credit Card Tips fr om the To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard interest paid for purchases on Feder al Res erv e Boar d Fees the card. Multiple interest rates Set -up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. may be listed here, because the •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) final interest rate may depend Trans action Fees •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) on the creditworthiness of the • • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater Foreign Tr ans action: 2% of each transaction in U.S. dollars applicant Penalt y Fees • • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
  • 23. Introductory Rate Interest Rates and Interest Charges If the credit card has an Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. introductory rate it will be AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% shown in this section, which is Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: the APR charged during the 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. credit card's introductory period H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. after a credit card account is H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases opened. The card will have a Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website different APR after the Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar d introductory period ends Set -up and Maintenance Fees Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. What is the introductory rate for •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) this credit card offer? •Addit ional Card Fee: $5 annually (if applicable) Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is The introductory rate depends • greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is on the creditworthiness of the • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars applicant, but it will be Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 12.99%, 13.99%, or 14.99% • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
  • 24. Variable-rate APR Some cards will have a Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. variable-rate APR , which is Rate (AP R) for Pu rchases After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. AP R for Balance 15.99% an APR that may change Trans fers AP R for Cash •This APR will vary with the market based on the Prime Rate 21.99% Adv ances •This APR will vary with the market based on the Prime Rate depending on other factors, such Penalt y AP R and When it Applies 28.99% This APR may be applied to your account if you: 1.Make a late payment; as the prime rate. The prime 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. rate is an index that represents H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any the interest rate most banks Paying I nter est on Pu rchases interest on purchases if you pay your entire balance by the due date each month. Minimum I nter est If you are charged interest, the charge will be no less than $1.50. charge their most credit-worthy Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard customers Feder al Res erv e Boar d Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your What is the APR for Purchases for Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. this credit card offer? •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) 14.99% Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is Is this a variable-rate APR • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars or a fixed-rate APR? Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 Variable-rate APR • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
  • 25. Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. APR for Balance Transfers AP R for Balance Trans fers 15.99% •This APR will vary with the market based on the Prime Rate This section discloses the interest AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% paid for balance transfers , When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or which is the act of transferring 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. debt from one credit card account H ow to Av oid Paying I nter est on Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Pu rchases to another. Balance transfer fees Minimum I nter est Charge If you are charged interest, the charge will be no less than $1.50. may apply, even if the balance For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar d transfer APR is 0% Set -up and Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 What is the APR for balance •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) transfers for this credit card offer? Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is 15.99% • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
  • 26. ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. APR for Cash Advances H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. This section discloses the interest H ow to Av oid Paying I nter est on Pu rchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. paid for cash advances, such as Minimum I nter est Charge For Credit Card If you are charged interest, the charge will be no less than $1.50. To learn more about factors to consider when applying for or using a credit card, visit the website withdrawing cash from an ATM Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar d using a credit card. Cash advance Set -up and Maintenance Fees Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are fees may also apply assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) Trans action Fees •Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater What is the APR for cash advances •Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater •Foreign Tr ans action: 2% of each transaction in U.S. dollars for this credit card offer? Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 21.99% • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
  • 27. Penalty APR and Annu al Per centage Interest Rates and Interest Charges 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. When it Applies Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% •This APR will vary with the market based on the Prime Rate This section discloses the penalty Trans fers AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate APR, as well as the penalty terms Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; that trigger the penalty APR to 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these take effect H ow to Av oid reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases •Penalty APR is the interest Minimum I nter est Charge For Credit Card If you are charged interest, the charge will be no less than $1.50. To learn more about factors to consider when applying for or using a credit card, visit the website rate charged on new transactions Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar d if the penalty terms in the credit Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are card contract are triggered assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is What is the Penalty APR for this • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars credit card offer? Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 21.99% • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
  • 28. ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. How To Avoid Paying H ow to Av oid H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Interest on Purchases Paying I nter est on Pu rchases Minimum I nter est interest on purchases if you pay your entire balance by the due date each month. If you are charged interest, the charge will be no less than $1.50. This section explains how you Charge For Credit Card Tips fr om the To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard can avoid interest charges on a Feder al Res erv e Boar d Fees credit card Set -up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) How can a cardholder avoid paying •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) interest on a credit card? Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is By paying credit card bills • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is in full by the due date • more than $1000 Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
  • 29. ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: Minimum Interest 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or Charge 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. Credit card companies often H ow to Av oid Paying I nter est on Pu rchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. have a minimum interest Minimum I nter est Charge For Credit Card If you are charged interest, the charge will be no less than $1.50. To learn more about factors to consider when applying for or using a credit card, visit the website amount. These charges Tips fr om the Feder al Res erv e Boar d of the Federal Reserve Board at http://www.federalreserve.gov/creditcard typically range from $0.50 to Set -up and Maintenance Fees Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are $2 per month and are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) disclosed in this section of the Trans action Fees •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is credit card offer • greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 What is the minimum interest charge • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” for this credit card? * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill $1.50
  • 30. ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. For Credit Card Tips H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any from the Federal Reserve Paying I nter est on Pu rchases interest on purchases if you pay your entire balance by the due date each month. Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Board Charge For Credit Card Tips fr om the To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard This section directs Feder al Res erv e Boar d Fees consumers to the Federal Set -up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. Reserve website to obtain •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) more information about credit Trans action Fees •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) cards • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
  • 31. Set-up and Maintenance Fees Annu al Per centage Rate (AP R) for Interest Rates and Interest Charges 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market This section discloses any set- Pu rchases AP R for Balance Trans fers based on the Prime Rate. 15.99% •This APR will vary with the market based on the Prime Rate up and maintenance fees for AP R for Cash Adv ances Penalt y AP R and 21.99% •This APR will vary with the market based on the Prime Rate 28.99% the card, which can include When it Applies This APR may be applied to your account if you: 1.Make a late payment; 2.Go over your credit limit; annual fees, account set-up 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these fees, participation fees, and reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. additional card fees Pu rchases Minimum I nter est Charge If you are charged interest, the charge will be no less than $1.50. For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard •Annual fee is a yearly fee Feder al Res erv e Boar d Fees that may be charged for Set -up and Maintenance Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. having a credit card •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) What is the annual fee • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars for this credit card? Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 $20 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill
  • 32. ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: 1.Make a late payment; Transcation Fees 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. This section discloses any H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. transaction fees for the card, H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases which can include balance Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard transfer fees, cash advance Feder al Res erv e Boar d fees, and foreign transaction Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are fees assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) What is the fee for cash Trans action Fees •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is advances for this card? • greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater $5 or 3% of the Penalt y Fees • • Foreign Tr ans action: 2% of each transaction in U.S. dollars L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is amount of each cash • • more than $1000 Ov er- the- limit: $29 R etur ned Payment: $35 advance (whichever is * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 greater) days late in paying your bill
  • 33. Penalty Fees This section discloses the Annu al Per centage Interest Rates and Interest Charges 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. penalty fees for the card, Rate (AP R) for Pu rchases AP R for Balance After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. 15.99% which can include late- Trans fers AP R for Cash Adv ances •This APR will vary with the market based on the Prime Rate 21.99% •This APR will vary with the market based on the Prime Rate payment, over-the-limit, and Penalt y AP R and When it Applies 28.99% This APR may be applied to your account if you: 1.Make a late payment; returned payment fees 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these •Late payment fee is reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. charged when a cardholder Pu rchases Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge does not make the minimum For Credit Card Tips fr om the Feder al Res erv e To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard monthly payment by the due Boar d Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your date Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Over-the-limit fee is •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) •Addit ional Card Fee: $5 annually (if applicable) charged if the account balance Trans action Fees • • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is goes over the set credit limit greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” Does this card have an * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill over-the limit fee? Yes, the over-the-limit fee is
  • 34. ar d tC Cr e di Interest Rates and Interest Charges Annu al Per centage 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. Rate (AP R) for After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market Pu rchases based on the Prime Rate. AP R for Balance 15.99% Trans fers •This APR will vary with the market based on the Prime Rate AP R for Cash 21.99% Adv ances •This APR will vary with the market based on the Prime Rate Penalt y AP R and 28.99% When it Applies This APR may be applied to your account if you: How we calculate your 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or 4.Do any of the above on another account that you have with us. balance H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. Credit card companies can use H ow to Av oid Your due date is at least 25 days after the close of each billing cycle. We will not charge you any Paying I nter est on interest on purchases if you pay your entire balance by the due date each month. Pu rchases one of several methods to Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge For Credit Card To learn more about factors to consider when applying for or using a credit card, visit the website calculate the outstanding Tips fr om the of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e Boar d balance on a credit card. The Set -up and Maintenance Fees Fees NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your card and will reduce the amount of credit you initially have available. For example, if you are method used is disclosed in assigned the minimum credit limit of $250, initial available credit will be only about $209. •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) this section Trans action Fees •Addit ional Card Fee: $5 annually (if applicable) • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is greater • Foreign Tr ans action: 2% of each transaction in U.S. dollars What method is used to calculate the Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 balance on this card? • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” Average daily balance * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 days late in paying your bill (including new purchases)
  • 35. Interest Rates and Interest Charges Loss of Introductory Annu al Per centage Rate (AP R) for Pu rchases 12.99%, 13.99% or 14.99%, introductory APR for one year, based on your creditworthiness. After that, your APR will be 14.99%. This is a variable-rate APR that will vary with the market based on the Prime Rate. APR AP R for Balance Trans fers AP R for Cash 15.99% •This APR will vary with the market based on the Prime Rate 21.99% If the card has an introductory Adv ances Penalt y AP R and When it Applies •This APR will vary with the market based on the Prime Rate 28.99% This APR may be applied to your account if you: rate, this area will list how the 1.Make a late payment; 2.Go over your credit limit; 3.Make a payment that is returned; or lower introductory rate can be 4.Do any of the above on another account that you have with us. H ow long will the Penalty APR apply? If your APR’s are increased for any of these reasons, the Penalty APR will apply until you make six consecutive minimum payments when due. lost H ow to Av oid Paying I nter est on Pu rchases Your due date is at least 25 days after the close of each billing cycle. We will not charge you any interest on purchases if you pay your entire balance by the due date each month. Minimum I nter est If you are charged interest, the charge will be no less than $1.50. Charge How can the introductory APR be For Credit Card Tips fr om the To learn more about factors to consider when applying for or using a credit card, visit the website of the Federal Reserve Board at http://www.federalreserve.gov/creditcard Feder al Res erv e lost on this card? Boar d Fees Set -up and NOTICE: Some of these set-up and maintenance fees will be assessed before you begin using your If the cardholder is more Maintenance Fees card and will reduce the amount of credit you initially have available. For example, if you are assigned the minimum credit limit of $250, initial available credit will be only about $209. than 60 days late in paying •Annual Fee: $20 •Account Set -up F ee: $20 (one-time fee) •P articipation Fee: $12 annually ($1 per month) the bill •Addit ional Card Fee: $5 annually (if applicable) What APR will the cardholder Trans action Fees • Balance Tr ans fer : Either $5 or 3% of the amount of each transfer, whichever is greater (maximum fee: $100) • Cas h Advance: Either $5 or 3% of the amount of each cash advance, whichever is be charged if the introductory • greater Foreign Tr ans action: 2% of each transaction in U.S. dollars rate is lost? Penalt y Fees • L at e Payment: $29 if balance is less than or equal to $1000 OR $35 if balance is more than $1000 • Ov er- the- limit: $29 The Penalty APR of • R etur ned Payment: $35 * How We Will Calculate Your Balance: We use a method called “average daily balance (including new purchases).” * Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR if you become more than 60 28.99% days late in paying your bill
  • 36. ard t C ard edi t C Cr edi r Credit Card Benefits C • Research benefits that may be received from the card – Cash rebates – Warranties for items purchased with the card – Travel accident insurance – Frequent flyer miles • Make sure to know all terms and conditions of card benefits • Cards that offer benefits may charge fees or higher interest rates
  • 37. ard Cr edi Cr t C ard edi t C Receiving a Credit Card 1. Compare credit card offers and determine which card to apply for 2. Complete a credit application – A form requesting information about a person’s ability to repay and the applicant’s age – Can be completed through the mail, the internet or over the phone
  • 38. ard Cr edi Cr t C ard edi t C Receiving a Credit Card 3. Lenders conduct a credit investigation – A comparison of information on credit application to information on a credit report 4. Applicants may or may not be approved for the card they apply for – Approval depends on the applicant's credit history
  • 39. ard Cr edi Cr t C ard edi t C Pre-Approved Credit Card Applications • Credit card companies send pre-approved credit card applications in the mail – If an individual is pre-approved for that particular card, they have passed the initial credit check Let’s do some comparison shopping…
  • 40. ard Cr edi Cr t C ard edi t C Credit Card Statements • Credit card statements outline important information about the card • The 2009 CARD Act required credit card companies to include specific information about a card account in the statement Andrew’s Credit Card Statement Please help Andrew interpret his credit card statement.
  • 41. Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you Summary of Account Cash Advances Past Due Amount Fees Charged 1 +318.00 +0.00 +69.45 4 may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% Minimum Payment War ning : If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… Interest Charged +10.89 Activity New Balance   Credit Limit $1,784.53 $2,000.00     If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… This section includes payments, Available credit Statement closing date Days in billing cycle $215.47 3/22/2012 30 Only the minimum payment $62 10 years 3 years $3,284 $2,232 credits, purchases, balance Notice of Changes to Y our I nter est Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: 5 Important Changes to You r Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed 6 transfers, cash advances, fees, Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR with this statement. These changes will impact your account as follows: will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases Transactions made before 4/9/12: Current rates will continue to apply to will increase to 16.99%. interest charges, amounts past these transactions. If you become more than 60 days late on your account, Transactions made before 4/9/12: Current APRs will continue to apply to the Penalty APR will apply to hose transactions as well. these transactions. Transactions 7 due, the new balance, available Reference Number XXXX1 Trans Date 2/22 Post Date 2/23 Description of Transaction or Credit Store #1 Amount $529.57 credit, and the last day of the XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees billing period XXXX5 XXXX6 2/23 2/27 2/23 2/27 Late Fee Balance Transfer Fee $35.00 $23.55 XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 Interest Charged       Interest Charge on Purchases $6.31 How much did Andrew charge in       Interest Charge on Cash Advances $4.58       Total Interest for this Period $10.89 2012 Totals Year-to-Date new purchases during this credit card Total fees charged in 2012 Total interest charged in 2012 $90.14 $18.27 9 billing cycle? I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 $529.57 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
  • 42. Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay Payment Information Fees Charged Interest Charged New Balance +69.45 +10.89 $1,784.53 4 more in interest and it will take you longer to pay off your balance. For example…   If you make no additional You will pay off the balance And you will end up charges using this card and shown on this statement in paying an estimated total This section includes the total     each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum 10 years $3,284 Statement closing date 3/22/2012 payment new balance, the minimum Days in billing cycle 30 $62 3 years $2,232 Notice of Changes to Y our I nter est Rates 5 Important Changes to You r Account Terms 6 payment amount, and the date You have triggered the Penalty APR of 28.99%. This change will impact The following is a summary of changes that are being made to your account your account as follows: terms. For more detailed information, please refer to the booklet enclosed Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR with this statement. These changes will impact your account as follows: will apply to these transactions. We may keep the APR at this level payment is due indefinitely. Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases Transactions made before 4/9/12: Current rates will continue to apply to will increase to 16.99%. these transactions. If you become more than 60 days late on your account, Transactions made before 4/9/12: Current APRs will continue to apply to the Penalty APR will apply to hose transactions as well. these transactions. Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees What is Andrew’s minimum payment XXXX5 XXXX6 2/23 2/27 2/23 2/27 Late Fee Balance Transfer Fee $35.00 $23.55 due for this billing cycle? XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 Interest Charged       Interest Charge on Purchases $6.31       Interest Charge on Cash Advances $4.58       Total Interest for this Period $10.89 $53.00 Total fees charged in 2012 2012 Totals Year-to-Date $90.14 9 Total interest charged in 2012 $18.27 I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
  • 43. Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay 4 more in interest and it will take you longer to pay off your balance. For example… Late Payment Warning Fees Charged +69.45 Interest Charged +10.89 New Balance $1,784.53   If you make no additional charges using this card and You will pay off the balance shown on this statement in And you will end up paying an estimated total     This section states any each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum 10 years $3,284 Statement closing date 3/22/2012 payment $62 3 years $2,232 additional fees and the higher Days in billing cycle 30 Notice of Changes to Y our I nter est Rates You have triggered the Penalty APR of 28.99%. This change will impact 5 Important Changes to You r Account Terms The following is a summary of changes that are being made to your account 6 interest rate that may be charged your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases if a payment is late Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 How much is Andrew’s XXXX4 3/15 3/17 Balance Transfer Fees $785.00 XXXX5 2/23 2/23 Late Fee $35.00 late payment fee? XXXX6 XXXX7 2/27 2/28 2/27 2/28 Balance Transfer Fee Cash Advance Fee 8 $23.55 $10.90       Total Fees for this Period $69.45 $35             Interest Charged Interest Charge on Purchases Interest Charge on Cash Advances $6.31 $4.58       Total Interest for this Period $10.89 2012 Totals Year-to-Date Total fees charged in 2012 Total interest charged in 2012 $90.14 $18.27 9 I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
  • 44. Minimum Payment Andrew’s Credit Card Statement Warning Summar y of Accou nt Act iv ity Previous Balance Payments 535.07 -450.00 New Balance Minimum Payment Due Payment Information 2 $1784.53 $53.00 This section includes an Purchases Balance Transfers +529.57 +785.00 3 Payment Due Date 4/20/12 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 estimate of how long it can take Minimum Payment War ning : If you make only the minimum payment each period, you will pay Fees Charged Interest Charged +69.45 +10.89 4 more in interest and it will take you longer to pay off your balance. For example… New Balance $1,784.53   If you make no additional You will pay off the balance And you will end up to pay off a credit card balance charges using this card and shown on this statement in paying an estimated total     each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum 10 years $3,284 Statement closing date 3/22/2012 payment if only the minimum payment is Days in billing cycle 30 $62 3 years $2,232 Notice of Changes to Y our I nter est Rates 5 Important Changes to You r Account Terms 6 made each month, and an You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: estimate of the total amount indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. paid, including interest, if the Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount bill is paid in three years Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 (assuming no additional charges XXXX4 XXXX5 3/15 2/23 3/17 2/23 Balance Transfer Late Fee Fees $785.00 $35.00 are made) XXXX6 XXXX7   2/27 2/28   2/27 2/28   Balance Transfer Fee Cash Advance Fee Total Fees for this Period 8 $23.55 $10.90 $69.45 Interest Charged       Interest Charge on Purchases $6.31 How long will it take Andrew to pay       Interest Charge on Cash Advances $4.58       Total Interest for this Period $10.89 2012 Totals Year-to-Date off the balance of his credit card if he Total fees charged in 2012 Total interest charged in 2012 $90.14 $18.27 9 only pays the minimum payment? I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances 21.99% 10 $253.50 $4.58 10 years Balance Transfers 0.00% $637.50 $0.00
  • 45. Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 3 Notice of Changes to Balance Transfers +785.00 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay Fees Charged +69.45 4 more in interest and it will take you longer to pay off your balance. For example… Your Interest Rates Interest Charged New Balance   +10.89 $1,784.53     If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Credit Limit $2,000.00 If a cardholder triggers the Available credit Statement closing date Days in billing cycle $215.47 3/22/2012 30 Only the minimum payment $62 10 years 3 years $3,284 $2,232 Penalty APR, the credit card Notice of Changes to Y our I nter est Rates You have triggered the Penalty APR of 28.99%. This change will impact 5 Important Changes to You r Account Terms The following is a summary of changes that are being made to your account 6 your account as follows: terms. For more detailed information, please refer to the booklet enclosed issuer must notify them on their Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases Transactions made before 4/9/12: Current rates will continue to apply to statement that their rates will be will increase to 16.99%. these transactions. If you become more than 60 days late on your account, Transactions made before 4/9/12: Current APRs will continue to apply to the Penalty APR will apply to hose transactions as well. these transactions. Transactions 7 increasing Reference Number Trans Date Post Date Description of Transaction or Credit Store #1 Amount $529.57 XXXX1 2/22 2/23 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 Has Andrew triggered XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 the Penalty APR?             Interest Charged Interest Charge on Purchases Interest Charge on Cash Advances $6.31 $4.58       Total Interest for this Period $10.89 Yes, he will pay 28.99% on Total fees charged in 2012 2012 Totals Year-to-Date $90.14 9 all transactions made after Total interest charged in 2012 $18.27 4/9/12. Type of Balance Purchases 14.99% I nter est Charge Calcu lation Annual P ercentage Rate (APR) Balance Subject to Interest Rate $512.14 Interest Charge $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
  • 46. Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Important Changes to Purchases Balance Transfers +529.57 +785.00 3 Payment Due Date 4/20/12 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Your Account Terms Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay Fees Charged Interest Charged +69.45 +10.89 4 more in interest and it will take you longer to pay off your balance. For example… New Balance $1,784.53   If you make no additional You will pay off the balance And you will end up In this section of the statement, charges using this card and shown on this statement in paying an estimated total     each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum 10 years $3,284 Statement closing date 3/22/2012 payment cardholders must be notified of Days in billing cycle 30 $62 3 years $2,232 Notice of Changes to Y our I nter est Rates 5 Important Changes to You r Account Terms 6 any raise in rates or fees or any You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: other significant changes to the indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, the Penalty APR will apply to hose transactions as well. Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to these transactions. account Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees Other than implementation of the XXXX5 XXXX6 2/23 2/27 2/23 2/27 Late Fee Balance Transfer Fee $35.00 $23.55 Penalty APR, will there be any other XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 Interest Charged changes to Andrew’s account terms?             Interest Charge on Purchases Interest Charge on Cash Advances Total Interest for this Period $6.31 $4.58 $10.89       2012 Totals Year-to-Date Total fees charged in 2012 Total interest charged in 2012 $90.14 $18.27 9 Yes, his APR for Purchases is I nter est Charge Calcu lation increasing to 16.99%. Type of Balance Purchases Annual P ercentage Rate (APR) 14.99% Balance Subject to Interest Rate $512.14 Interest Charge $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
  • 47. Transactions Andrew’s Credit Card Statement This section includes a list of all Summar y of Accou nt Act iv ity Previous Balance Payments 535.07 -450.00 New Balance Minimum Payment Due Payment Information 2 $1784.53 $53.00 the transactions that have Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay occurred since the last statement Fees Charged Interest Charged New Balance +69.45 +10.89 $1,784.53 4 more in interest and it will take you longer to pay off your balance. For example…   If you make no additional You will pay off the balance And you will end up charges using this card and shown on this statement in paying an estimated total (purchases, payments, credits,     each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum 10 years $3,284 Statement closing date 3/22/2012 payment cash advances, and balance Days in billing cycle 30 $62 3 years $2,232 Notice of Changes to Y our I nter est Rates 5 Important Changes to You r Account Terms 6 transfers). This section should You have triggered the Penalty APR of 28.99%. This change will impact The following is a summary of changes that are being made to your account your account as follows: terms. For more detailed information, please refer to the booklet enclosed Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR with this statement. These changes will impact your account as follows: will apply to these transactions. We may keep the APR at this level be carefully reviewed by the indefinitely. Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases Transactions made before 4/9/12: Current rates will continue to apply to will increase to 16.99%. these transactions. If you become more than 60 days late on your account, Transactions made before 4/9/12: Current APRs will continue to apply to the Penalty APR will apply to hose transactions as well. these transactions. cardholder to ensure there are Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount Number Date no unauthorized charges or XXXX1 XXXX2 XXXX3 2/22 2/25 2/26 2/23 2/26 2/26 Store #1 Payment Cash Advance $529.57 $450.00 - $318.00 errors XXXX4 XXXX5 3/15 2/23 3/17 2/23 Balance Transfer Late Fee Fees $785.00 $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 How much did Andrew charge on             Interest Charged Interest Charge on Purchases Interest Charge on Cash Advances $6.31 $4.58 his credit card to Store #1?       Total Interest for this Period 2012 Totals Year-to-Date $10.89 Total fees charged in 2012 $90.14 9 $529.57 Total interest charged in 2012 $18.27 I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
  • 48. Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay Fees and Interest Charged Fees Charged Interest Charged New Balance +69.45 +10.89 $1,784.53 4 more in interest and it will take you longer to pay off your balance. For example…   If you make no additional You will pay off the balance And you will end up Credit card issuers must list the charges using this card and shown on this statement in paying an estimated total     each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum 10 years $3,284 Statement closing date 3/22/2012 payment fees and interest charges Days in billing cycle 30 $62 3 years $2,232 Notice of Changes to Y our I nter est Rates 5 Important Changes to You r Account Terms 6 separately on the monthly You have triggered the Penalty APR of 28.99%. This change will impact The following is a summary of changes that are being made to your account your account as follows: terms. For more detailed information, please refer to the booklet enclosed Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR with this statement. These changes will impact your account as follows: will apply to these transactions. We may keep the APR at this level statement. Interest charges must indefinitely. Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases Transactions made before 4/9/12: Current rates will continue to apply to will increase to 16.99%. these transactions. If you become more than 60 days late on your account, Transactions made before 4/9/12: Current APRs will continue to apply to the Penalty APR will apply to hose transactions as well. these transactions. be listed by type of transaction Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 Did Andrew pay a late fee? XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 Interest Charged       Interest Charge on Purchases $6.31 Yes, he paid $35.00 for a late             Interest Charge on Cash Advances Total Interest for this Period $4.58 $10.89 2012 Totals Year-to-Date fee. Total fees charged in 2012 Total interest charged in 2012 $90.14 $18.27 9 I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
  • 49. Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Past Due Amount +0.00 Minimum Payment War ning : If you make only the minimum payment each period, you will pay Fees Charged +69.45 4 more in interest and it will take you longer to pay off your balance. For example… Year-to-Date Totals Interest Charged New Balance   +10.89 $1,784.53     If you make no additional charges using this card and each month you pay… You will pay off the balance shown on this statement in about… And you will end up paying an estimated total of… Credit Limit $2,000.00 The total amount paid in fees Available credit Statement closing date Days in billing cycle $215.47 3/22/2012 30 Only the minimum payment $62 10 years 3 years $3,284 $2,232 and interest charges for the Notice of Changes to Y our I nter est Rates You have triggered the Penalty APR of 28.99%. This change will impact 5 Important Changes to You r Account Terms The following is a summary of changes that are being made to your account 6 your account as follows: terms. For more detailed information, please refer to the booklet enclosed current year must be shown on Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR will apply to these transactions. We may keep the APR at this level indefinitely. with this statement. These changes will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases Transactions made before 4/9/12: Current rates will continue to apply to the statement will increase to 16.99%. these transactions. If you become more than 60 days late on your account, Transactions made before 4/9/12: Current APRs will continue to apply to the Penalty APR will apply to hose transactions as well. these transactions. Reference Trans Post Date Transactions 7 Description of Transaction or Credit Amount Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 What is the total amount of interest XXXX5 2/23 2/23 Late Fee Fees $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 Andrew has paid in the year 2012? XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 Interest Charged       Interest Charge on Purchases $6.31       Interest Charge on Cash Advances $4.58       Total Interest for this Period $10.89 $18.27 Total fees charged in 2012 2012 Totals Year-to-Date $90.14 9 Total interest charged in 2012 $18.27 I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00
  • 50. Andrew’s Credit Card Statement Summar y of Accou nt Act iv ity Payment Information Previous Balance 535.07 New Balance 2 $1784.53 Interest Charge Payments -450.00 Minimum Payment Due $53.00 Purchases +529.57 Payment Due Date 4/20/12 Balance Transfers +785.00 3 Late Payment Warning : If we do not receive your minimum payment by the date listed above, you may have to pay a $35 fee and your APR’s may be increased up to the Penalty rate of 28.99% 1 Cash Advances +318.00 Calculation Past Due Amount Fees Charged Interest Charged +0.00 +69.45 +10.89 4 Minimum Payment War ning : If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example… This section includes a summary   New Balance $1,784.53 If you make no additional You will pay off the balance And you will end up charges using this card and shown on this statement in paying an estimated total     each month you pay… about… of… Credit Limit $2,000.00 Available credit $215.47 Only the minimum of the interest rates on the 10 years $3,284 Statement closing date 3/22/2012 payment Days in billing cycle 30 $62 3 years $2,232 different types of transactions, Notice of Changes to Y our I nter est Rates You have triggered the Penalty APR of 28.99%. This change will impact your account as follows: Transactions made on or after 4/9/12: As of 5/10/12, the Penalty APR 5 Important Changes to You r Account Terms The following is a summary of changes that are being made to your account terms. For more detailed information, please refer to the booklet enclosed with this statement. These changes will impact your account as follows: 6 account balances, the amount of will apply to these transactions. We may keep the APR at this level indefinitely. Transactions made before 4/9/12: Current rates will continue to apply to these transactions. If you become more than 60 days late on your account, Transactions made on or after 4/9/12: As of 5/10/12, APR for Purchases will increase to 16.99%. Transactions made before 4/9/12: Current APRs will continue to apply to each, and the interest charged the Penalty APR will apply to hose transactions as well. Transactions these transactions. 7 for each type of transaction Reference Trans Post Date Description of Transaction or Credit Amount Number Date XXXX1 2/22 2/23 Store #1 $529.57 XXXX2 2/25 2/26 Payment $450.00 - XXXX3 2/26 2/26 Cash Advance $318.00 XXXX4 3/15 3/17 Balance Transfer $785.00 Fees XXXX5 2/23 2/23 Late Fee $35.00 XXXX6 2/27 2/27 Balance Transfer Fee $23.55 What interest rate is Andrew paying XXXX7   2/28   2/28   Cash Advance Fee Total Fees for this Period 8 $10.90 $69.45 on cash advances?             Interest Charged Interest Charge on Purchases Interest Charge on Cash Advances $6.31 $4.58       Total Interest for this Period $10.89 21.99% Total fees charged in 2012 2012 Totals Year-to-Date $90.14 9 Total interest charged in 2012 $18.27 I nter est Charge Calcu lation Type of Balance Annual P ercentage Rate (APR) Balance Subject to Interest Rate Interest Charge Purchases 14.99% $512.14 $6.31 Cash Advances Balance Transfers 21.99% 0.00% 10 $253.50 $637.50 $4.58 $0.00 Let’s take a look at another credit card statement…
  • 51. ard Cr edi Cr t C ard edi t C Cardholder Protections & Rights Limits liability for unauthorized credit card charges to $50.00 per card Must write a letter within 60 days of the first bill containing the error If a credit card number is used fraudulently but the card itself was not used, the individual has no personal liability
  • 52. ard Cr edi Cr t C ard edi t C Cardholder Protections & Rights 2009 CARD Act – To receive a credit card, consumers must be 21 years of age or older • Consumers under 21 have to either have a co-signer or show documentation of sufficient income to make payments • If someone agrees to be a co-signer on an account, they are equally responsible for the loan – Interest rates on existing balances generally can’t be raised unless a cardholder is 60 days or more past due
  • 53. ard Cr edi Cr t C ard edi t C Cardholder Protections & Rights 2009 CARD Act – Must be notified of any significant changes in rates and fees at least 45 days before the changes take effect • Any changes made to an account can only apply to future transactions (new charges) • Have the option of closing the account before the changes go into effect – Cardholders now have to “opt-in” to allowing transactions that take them over their credit limit
  • 54. ard Cr edi Cr t C ard edi t C Cardholder Protections & Rights 2009 CARD Act – Credit card issuers are required to send a monthly statement at least 21 days before a credit card payment is due – Credit card payment due dates must be consistent month to month
  • 55. ard Cr edi Cr t C ard edi t C Cardholder Protections & Rights 2009 CARD Act – Credit card companies cannot increase rates for the first 12 months after an account is open unless: • The card has a variable interest rate • The cardholder is more than 60 days late in paying their bill • The card has an introductory rate (the introductory rate must be in place for at least 6 months and then the rate can increase)
  • 56. ard Cr edi Cr t C ard edi t C Cardholder Protections & Rights 2009 CARD Act – Some set-up and maintenance fees are charged before the card is used – This may reduce the amount of credit initially available • These non-penalty fees cannot exceed 25% of the initial credit limit • For example, if a card has a credit limit of $1,000 the total fees for the first year (not including penalty fees) cannot exceed $250
  • 57. ard Cr edi Cr t C ard edi t C Credit Card Safety Tips Do not leave cards Close unwanted Sign card with a lying around, and accounts by writing signature and “Please report lost or stolen and phone, then cut see ID” cards promptly up the card Do not give out Keep a list of all cards, Shred all pre-approved account numbers account numbers, and credit card offers, phone lists separate from unless making a cards applications, or purchase solicitations
  • 58. ard t C ard edi t C Cr edi r Fair Credit Billing Act C • Helps to protect consumers while using a credit card to make purchases • Allows the consumer to not pay for a product or service for which the consumer has a complaint • If products are not delivered or if it is not what the consumer requested, any amount of money that was credited to the card above the $50.00 fee that consumers are responsible for will be issued back • Debit cards do not have the same protection
  • 59. ard t C ard edi t C Cr edi Summary Cr A credit card is pre-approved credit which can be used for the purchase of goods and services now and payment of them later To avoid paying interest on a credit card, pay the balance in full every month A credit card can have a positive or a negative impact on an individual’s credit history
  • 60. ard t C ard edi t C Cr edi Summary Cr Credit card companies are required to disclose the terms and fees of a credit card in the Schumer’s box Credit card statements outline important information about a credit card and should be checked carefully for errors Consumers have many protections and rights in regards to credit card use