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Credit Cards & Credit Ratings

Credit Cards & Credit Ratings. Mr. Raposo / Mr Schoenhardt KCSS. Learning Goals. We are listing the pros/cons of credit We are describing how to apply for and obtain credit Success Criteria: I can explain how to maintain a good credit rating

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Credit Cards & Credit Ratings

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  1. Credit Cards & Credit Ratings Mr. Raposo/MrSchoenhardt KCSS

  2. Learning Goals • We are listing the pros/cons of credit • We are describing how to apply for and obtain credit Success Criteria: • I can explain how to maintain a good credit rating • I explain the advantages/disadvantages of credit

  3. Game Plan • Chapter 15: Credit PPT notes (15 min) • Video: In Debt We Trust (35 min) • Handout: The 3 C’s of credit and applying for credit (20 min)

  4. Overview • What is a credit rating? • How do you establish a credit card? • Good uses of credit • Poor uses of credit • Signs of money problems

  5. What is a credit rating? • A credit rating is your reputation for paying back loans and other money you owe (credit cards) You need a good credit rating to : • Obtain a loan • Rent apartments • Obtain a higher limit on your credit card

  6. How do you establish a credit rating? • Get a credit card • Get a phone in your name • Student loan (and paying it off) • Borrow only what you need and can afford • Pay off loans quickly and on time

  7. Good Uses of Credit • Home mortgage (a loan to buy a home) • Automobile • Purchase of an item that will last longer than the period of debt incurred to buy it • For safety and convenience • To take advantage of credit card features such as guarantees and insurance • When the purchase is a necessity not a luxury

  8. Poor Uses of Credit • Tempted to overspend • Impulse purchases • Unnecessary items • When you cannot pay for your existing credit card balances

  9. Signs of Money Problems • Spending money makes you feel good • Living paycheck to paycheck • Frequently borrowing small amounts • Interest charges on credit card bill • Having no idea how much you owe • Never saving a dime

  10. Improving your spending • Keep good records and receipts • Avoid impulse shopping • Take credit seriously • Make a shopping list • Pay cash or debit • Buy private or generic products (instead of expensive name brands)

  11. Advantages/Disadvantages of Consumer Credit • Refer to handout from class

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