Online Version for Program
Course Credit 2010-11
Credit and Credit Cards
Goals for This Meeting
Commitment to Glow Foundation’s program
Be prompt and prepared for all Glow sessions
(including HW items)
Reach out for help when needed
Respond promptly to emails or phone calls
Share the information learned with family and peers
Be respectful (one mic)/confidentiality
Accountable for myself and the group success
__ Annual Fee a) A company that gathers information on
consumers who use credit.
__ Annual Percentage b) A document issued by an independent credit
Rate (APR) agency that contains information concerning a loan
applicant’s credit history and current credit
__ Credit Bureau c) An amount a credit card company charges a
credit card holder to use the card for a year.
__ Credit Report d) A rating system that indicates a person’s
creditworthiness based on a number of criteria.
__ Credit Score e) The total amount of money borrowed not
including interest or service charges.
__ Principal f) A rate used to compare different loans
which takes into account the loan’s interest rate,
term, and fees.
FIRST, let’s come up with a group definition for
How can you start to build good credit?
What are signs of bad credit?
Good Credit Signs Bad Credit Signs
Paying at least the minimum Paying less than the minimum
Paying on time Paying late
Making all payments Missing payments
Staying within your credit limit Exceeding your credit limit
Establishing credit is important for borrowing money
later. No credit is not the same as good credit!
How Credit Impacts You
Establishing good credit history is important!
Credit can affect various aspects of your life:
Lenders: Determine whether you can get a loan and the loan
terms (good credit = better interest rate)
Insurance Companies: Determine if you can get insurance and
the rates you pay
Employers: Can affect you ability to get a job
Landlords: Determines whether you can rent an apartment
Telephone and other utility companies can use this to
determine whether to provide services to you.
Credit Score: A number between 300-900 that
indicates your creditworthiness.
• The higher the number, the stronger your score.
• Points are earned based on factors like your payment
history, the length of your credit history, and
What is a credit report?
A document issued by an independent credit agency that contains
information concerning a loan applicant’s credit history and
current credit standing.
Review your credit report:
2.Before making a big purchase
People/Companies Review Your Credit Report When You:
1.Complete a credit card application
2.Complete a rental application
3.Apply for a loan
Credit Cards vs. Debit Cards
Credit cards allow you to purchase something TODAY and pay
it off over time.
Credit cards are NOT the same as debit cards
Credit Cards Debit Cards
Payment Pay Later Pay NOW
Interest Interest is charged on the No
Charges remaining balance
Pros Potential to build your credit Prevent major debt
history and get freebies/points
Cons Additional fees; risk of Fees if you overdraw
overspending and hurting your
Before Getting a Credit Card…
SHOP AROUND!! Know:
1. Are there annual fees or other regular charges?
2. What is the credit limit?
3. What is the interest rate? Is it fixed or variable?
4. What is the Annual Percentage Rate or APR (Measurement
that takes into account the interest rate, term, and fees)
5. Are there benefits to getting this card (points, freebies,
Paying Your Credit Card
Original APR Monthly Number of Term Total
Balance Payments Monthly (Years) Amount
$1000 18% Minimum 87 7 $1,516
$1000 18% Minimum + 26 2 $1,187
$1000 18% Minimum + 16 1 $1,119
TAKEAWAY: Pay as much of the balance as possible to reduce
the term and amount of interest paid. Whenever possible, pay
off your bill in full!
Tips for Managing Your Credit Card
1. Use cash or debit cards for daily expenses
2. Know how you are going to pay for your credit card
purchases before you start spending
3. Get a card with low interest and pay as much of the
balance as possible
4. Pay on time
5. Don’t spend more than you have. Stay within your
6. Don’t exceed your credit limit