1 / 13

Personal Finance: Credit Cards and Bankruptcy

Personal Finance: Credit Cards and Bankruptcy. credit : the borrowing capacity of an individual or company; a transaction in which a borrower (or debtor) receives goods, services, or cash and agrees to repay the lender at a future date, normally with interest.

arkadiy-popov
Download Presentation

Personal Finance: Credit Cards and Bankruptcy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Personal Finance: Credit Cards and Bankruptcy

  2. credit: the borrowing capacity of an individual or company; a transaction in which a borrower (or debtor) receives goods, services, or cash and agrees to repay the lender at a future date, normally with interest • creditor: the lender or supplier of money, goods, services, or securities • debtor: somebody who owes money, goods, services, or securities

  3. annual percentage rate (APR): a rate that shows the total cost of credit annually; it includes a percentage of the principle as interest on a loan plus other costs (ex. points on a mortgage loan, service charges, etc.) • capital: the amount of monetary resources a potential buyer and/or loan applicant has available; a measure of creditworthiness • collateral: an asset such as an automobile or a piece of property that a person uses when taking out a loan, promising to give the asset to the lender if loan payments cannot be met

  4. -predatory lending: fraudulent, unethical, discriminatory, or abusive lending practices designed to exploit vulnerable borrowers and lead to their increased indebtedness (ex. excessive and disguised fees for home mortgages) • principal: the original sum invested or loaned

  5. Credit Cards (2012) • About 70% of Americans have at least one credit card. • U.S. credit card debt= $858 billion • Average credit card debt per person= $7,194 • College students graduate with average of $4,138 credit card debt! (2008)

  6. Credit Reports and Scores • 3 credit bureaus check/compile everyone’s credit score: Trans Union, Equifax, and Experian. • FICO scores show a person’s past payment history. Banks, credit card companies, landlords, and even employers use people’s credit scores to determine how likely individuals are to default on payments. • Credit scores= range between 300-850

  7. How do I establish good credit? • Open savings or checking account, and don’t overdraft! • Pay off credit card on time and pay more than minimum payment (avoids interest) • Pay bills on time (i.e. cell, utilities, etc.) • Pay rent on time (apt., mortgage, etc.) • Don’t spend more than 30% of credit limit, and don’t open up multiple lines of credit. • Age quicker!

  8. Building a solid credit score can lead to you being granted an apt., car loan, TV, or anything else that would require routine payments. *Also, the better the credit score, the lower the interest rates you will receive! (meaning you will pay less over the long-term) -Negative credit info can stay on your credit report for 7 years.

  9. Bankruptcy - liquidation: to sell all of a company’s assets, pay outstanding debts, and distribute the remainder to shareholders, then go out of business • Chapter 7: the part of the U.S. Bankruptcy Code allowing the liquidation of all of a debtor’s nonexempt assets to pay creditors (ex. sale of property)

  10. Chapter 11: the U.S. Bankruptcy Code allowing companies (or high-earning individuals) to reorganize their debt or rehabilitate and reorganize their financial structure; the goal is to propose a plan that is accepted by a vote of the creditors. • Chapter 13: allows an individual to begin debt repayment without forfeiting property: Chapter 13 requires that the debtor maintain a source of income and adhere to a payment schedule set forth by the court. *Bankruptcies stay on your credit report for up to 10 years.

  11. Kim Bassinger PT Barnum Samuel L. Clemons Gary Coleman Walt Disney Henry Ford Marvin Gaye Ulysses S. Grant Johannes Gutenberg Tony Gwynn Corey Haim MC Hammer Larry King Suge Knight Stan Lee (creator of Spider Man, Incredible Hulk, The X-Men) Abe Lincoln Meatloaf Willie Nelson Wayne Newton Rembrandt (painter) Burt Reynolds Run DMC Lawrence Taylor Donald Trump Mike Tyson Johnny Unitas Michael Vick Famous Individual Bankruptcies

  12. Chrysler Circuit City Continental Airlines Converse Delta Airlines Enron General Motors Kmart Mervyn’s Northwest Airlines Planet Hollywood Sizzler restaurant Six Flags US Airways Western Union bank Zenith electronics Famous Corporate Bankruptcies

More Related