MARISSA DORIABLOCK 3

Credit Cards

Credit

Money available for a client to borrow

Finance Charge

Finance Charge—Total dollar cost of credit, including interest and all other charges

Credit Companies may charge a finance charge to make you aware of the total cost of credit

Interest Rate

Interest rates credit card companies usually charge is 12%.

It is dangerous to pay the minimal amount each month because you are less likely to get your bill payed

Common Credit Card Companies

VisaDiscoverAmerican ExpressMasterCard

Credit Rating

It is important to know your credit rating so you know when you need to borrow money or when you need to make a major purpose.

Good Score: High 700’sBad Score: 499 and belowYou get your credit rating score checked

when you are trying to get a loan and/or applying for a job

Benefits of using a Credit Card

ConvenienceImmediate PossessionSavingsCredit RatingUseful for Emergencies

Problems concerned with Credit

OverbuyingCareless BuyingHigher PricesOveruse of Credit

Calculating Interest

Interest = Principle x Rate x Time

Credit Application

Form on which you provide information needed by a lender to make a decision about granting credit

You often fill one out when you need a loan or are applying for job

Truth in Lending Law and Fair Credit Billing Act

First of a series of credit protection lawsRequires that you be told the cost of credit

before signing an agreementFair Credit Billing Act—Law that gives

consumers the right to know what information credit bureaus are giving to potential creditors, employers and insurers.