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Credit Cards

Credit Cards. What is a Credit card?. A plastic card that represents a line of credit A line of credit is an account with money that you can borrow repeatedly Your account will have a limit based on information from your application The money you spend must be paid back.

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Credit Cards

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  1. Credit Cards

  2. What is a Credit card? • A plastic card that represents a line of credit • A line of credit is an account with money that you can borrow repeatedly • Your account will have a limit based on information from your application • The money you spend must be paid back

  3. Parts of a Credit Card: Front

  4. Parts of a Credit Card: Back

  5. How Does A Credit Card Work? • Step 1 – Authorization • Step 2 – Batching • Step 3 – Clearing • Step 4 – Funding

  6. Credit Card Payments • When processing is complete you will get a charge on your credit card account • Most credit card companies offer several way to make payments • Pay online • Pay over the phone • Pay through the mail • Pay at a store or bank • Pay with another card (through a balance transfer) • Pay through an auto-debit (the company take the money directly from your bank account or pay check) • Minimum payment varies based on your credit card, but usually 2% of the balance or $15.00 (whichever is higher)

  7. Do credit cards have Fees? • Types of Fees: • Annual Fee • Application Fee • APR – Annual Percentage Rate – interest charged on balance • Balance Transfer Fee • Cash Advance Fee • Decline Fee • Foreign Transaction Fee • Late Fee • Over-the-Limit Fee

  8. How Can I Apply for a Credit Card? • You must be 18 or older and have a job • You can complete an application online, through the mail, or in a store • Common Parts of a Credit Application: • Card Features • Personal Information • Financial Information • Additional User Information • Terms and Disclaimers

  9. How Can I Avoid Credit Card Debt? • Causes of credit card debt: • Bad spending – spend more than you can pay back • Bad payments – fail to pay the full balance • Tips to manage your credit card: • Don’t buy anything you don’t have the money for • Keep track of your balance • Avoid high interest rates or high annual fees • Reserve your card for emergencies • Watch your account for any suspicious activity

  10. How Do Rewards Programs Work? • Common rewards include: • Cash back • Gas rewards • Air miles • Travel rewards • In addition some offer discounts for travel accommodations, online purchases and more • Be sure the carrying costs do NOTexceed its rewards

  11. Which Credit Card Should I Choose • Compare your options: • Annual Fee • Credit Level Requirements • APR – Annual Percentage Rate • Introduction Rates vs. Long Term Rates • Rewards Program • Reliability

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