Preventing Credit Card Blues at 22

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Preventing Credit Card Blues at 22
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Preventing Credit Card Blues at 22

• Developed by
• Debra Schroeder, M.S.
• Rebecca Versch, M.S.
• Carroll Welte, M.S.
• Extension Educators

• Cooperative Extension

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Credit To Use or Not to Use

• Credit Cards
• Competition for credit card customers has become
  very intense
• You are a prime target
• Goals
• Help you develop knowledge and skills to make
  wise decisions
• Manage credit wisely
• Protect your identity

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Preventing Credit Card Blues at 22

• Develop an understanding of the implications,
  responsibilities and risks of using (a) credit
  card(s)
• Develop decision making skills related to credit
  card use
• Minimize the risk of unmanageable credit card
  debt
• Develop budgets and spending plans you can follow

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Credit Card Blues at 22?

• Scenario
• Do you think filling out a credit card
  application is the right thing for Kinsley to do?

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Students and Credit Cards

• Dr. Robert Manning, the author of Consumer
  Federation of America(CFA) study on students and
  credit cards says, The unrestricted marketing of
  credit cards on college campuses is so aggressive
  that it now poses a greater threat than alcohol
  or sexually transmitted diseases.

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Credit Card Blues at 22

• Group Discussions of Scenarios

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Credit Card Offer Comparison

• After carefully studying the credit card
  applications which offer do you feel is best and
  why?
• Please share, with the class, any cautions and/or
  concerns that you learned by studying the credit
  card offers.

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Credit Card Versus Debit Card

• What advantages will Morgan have with a debit
  card?
• How is a debit card different from a credit card?
• What precautions should Morgan practice when
  using an ATM?

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Credit Card Versus Debit Card

• Credit Card
• Convenience of paying without additional interest
  charges
• No need to carry check book
• No additional identification needed
• No need to carry cash
• Credit available to cover emergency needs

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Credit Card Versus Debit Card

• Debit Cards
• Transactions come directly out of your checking
  account
• Provide access to own money
• Limit amount you spend
• Requires PIN number

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ATM Safety and Security Tips

• Be alert for anything suspicious
• Be share ATM is well lit
• Avoid ATMs with obscuring bushes
• Take a companion along at night
• Never accept offers for assistance
• Leave plenty of space between you and the person
  in front of you

• If someone is too close ask them to move. If not
  comfortable close transaction and leave
• Select different PIN
• Memorize PIN
• Check account statements carefully each month

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ATM Safety and Security Tips

• When transaction is complete take card, receipt,
  money and put them in your pocket.
• Dont count money at the ATM
• ATM robberies occur after the transaction
• Missing cards should be reported to issuer
  immediately

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Credit Card Use Reality

• Was buying tires an emergency which justified the
  use of her credit card?
• Is buying pizza an emergency?
• Why did the credit card company charge a late fee
  when she mailed her payment on October 10th?
• What will the APR be now that she has been late
  with her payment?
• What was the charge for getting a cash advance?
• What can Jayne do to avoid problems in the
  future?

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What Jayne Expected

• Tires 129.00
• Minimum Payment (October) 50.00
• Balance Remaining 79.00
• Pizza 15.00
• Cash Advance 10.00
• Interest on balance due 0.00 (at
  Introductory 0 APR)
• November Balance Due 104.00

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What Jayne Really Got!!

• Tires 129.00
• Minimum Payment --50.00
• Balance Remaining (October) 79.00
• October Late Fee 19.00
• Interest on Tires _at_ 1.70 Penalty Rate
  (15.99)
• Sub-total 99.70

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PlusJaynes New Charges

• Pizza 15.00
• Cash Advance 10.00
• Cash Advance Fee 5.00
• Cash Advance Interest---15.99 1.40 30 days on
  October Balance and
• 13 days on Cash Advance
• November Balance Due 131.10

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Protecting Sams Credit Identity

• What steps would you suggest to Sam to protect
  his credit and identity?

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Protecting Sams Credit Identity

• All sign lease
• Written agreement on bill payment
• Written rules of responsibilities
• Filing system for group bills
• File all personal bills and information

• Protect all personal information name, address,
  date of birth, Social Security number, mothers
  maiden name, and account numbers
• Shred all bills, credit card applications, junk
  mail and etc.
• Never give information over the phone

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Credit Reality Check

• How long will it take Lee to pay off his 2,500
  balance?
• How long will it take to reduce the balance to
  half?
• What is the final amount that Lee will pay to
  settle this bill?
• How much total interest will Lee pay?
• When will the monthly payment go more to
  principal than interest?
• At his 25th reunion how much will he still owe on
  this bill?
• What could have Lee done differently?

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Reporting a Missing Credit Card

• What steps should Laura take now that her student
  identification and credit card are missing? What
  suggestions would you give Laura for handling
  missing credit cards when she first realizes they
  are missing?

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Reporting a Missing Credit Card

• Immediately notify company
• May have to send information in writing
• Contact law enforcement
• Contact national credit reporting agencies
• Social Security number
• Student ID

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Credit Card Abuse Puts You at Risk

• What could be more important than your GPA or job
  performance record?
• Your Credit Report
• A negative report can
• Make it harder to rent an apartment
• Make it harder to buy a house or car
• Hinder you from obtaining your dream job

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Credit Card Abuse Puts You at Risk

• Handle credit responsibly,
• especially credit cards!

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Preventing Credit Card Blues at 22

• Cooperative Extension
• ? 2002 ? University of Nebraska ? NU Institute of
  Agriculture and Natural Resources