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Sarah Brown
6 years ago
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1 Give Me Some Credit

2 Copyright Texas Education Agency, These Materials are copyrighted and trademarked as the property of the Texas Education Agency (TEA) and may not be reproduced without the express written permission of TEA, except under the following conditions: 1) Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the Materials and Related Materials for the districts and schools educational use without obtaining permission from TEA. 2) Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual personal use only, without obtaining written permission of TEA. 3) Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered and unchanged in any way. 4) No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged. Private entities or persons located in Texas that are not Texas public school districts, Texas Education Service Centers, or Texas charter schools or any entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written approval from TEA and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty. For information contact: Office of Copyrights, Trademarks, License Agreements, and Royalties, Texas Education Agency, 1701 N. Congress Ave., Austin, TX ; phone ; copyrights@tea.state.tx.us. 2

3 What is Credit? 3

4 What is Credit? A term used to describe any situation in which goods, services or monies are received in exchange for a promise to pay a definite sum at a later date. 4

5 Credit Card vs. Debit Card 5

6 Credit Statistics According to First Command Educational Foundation: 862 million credit cards and debit cards in the United States 20 % of American have maxed out their credit cards Typical household has an average of $8400 in credit card debt and pays $83 in interest each month Average college student has $3200 in credit card debt 6

7 Pros and Cons of Credit 7

8 Pros of Credit Convenience No cash to carry Online and phone orders Establish credit Emergency situations 8

9 Cons of Credit Overspend Finance charges Late payments Debt Interest payments Non-payment Possibility of identity theft 9

10 Pros and Cons of Credit Think, Pair, Share Think about the Pros and Cons of Credit Turn to you neighbor Share your thoughts Lets compare your thoughts with what financial experts have discovered.. 10

11 Character 4 C s of Credit Creditworthiness, demonstrated by consumers history of making payments and responsible use of credit Capacity Amount of debt a borrower is able to handle Capital Valuable assets such as real estate, savings, or investments that could be used to repay credit debts if income is unavailable Collateral Assets pledged as security for a debt 11

12 Types of Credit Single Payment - Items and services are paid for in a single payment, within a given time period. Interest is usually not charged.. 12

13 Types of Credit Installment Credit - Paid in two or more scheduled payments for a set amount. Interest is charged. 13

14 Types of Credit Revolving Credit - Items purchase must not exceed the set credit limit. Payments are made on regular time intervals. Interest is charged based on the remaining balance. 14

15 All About Interest Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt. Annual Percentage Rate (APR) Cost of the loan on a yearly rate, expressed as a percentage. Grace Period Additional time allowed to make a payment before it is considered late Increases the actual cost of the item 15

16 Obtaining Credit Establish a relationship with a bank by setting up a checking account Complete an application for approval for a credit card If not approved, determine why you were denied Try obtaining credit with a department store to establish credit Ensure your credit limit is within your financial range and you will be able to make the monthly payment 16

17 Determining Your Credit Limit Total debt should not be more than 20% of your yearly income Example: $6000/year x 20% = $1200 Total monthly payment should not exceed 10% of your monthly income Example: $500 x 10% = $50 17

19 Resources and References Images: Microsoft Office Clip Art: Used with permission from Microsoft Websites: Consumer s Guide: Credit Federal Deposit Insurance Corporation FDIC Article - Debit vs. Credit Cards: How They Stack Up Financial Literacy Now What s My Score? The New York Times Money Guides: Debit and Credit Cards 19

Presentation Notes Give Me Some Credit

Presentation Notes Give Me Some Credit Page1 Slide 1 : Page2 Slide 2 Copyright Texas Education Agency, 2014. These Materials are copyrighted and trademarked as the property of the Texas Education Agency (TEA) and may not be reproduced without