Understanding Your

Credit Card

Credit Unit
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Credit
C

CREDIT-
When goods, services or
money is received in
exchange for a promise to
pay a definite sum of
money at a future date
INTEREST
- of money- when
The price
referring to credit, interest is
the charge for borrowing
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Lender and Borrower

C

LENDER- BORROWER
The person or -
organization The person or
who has the organization
resources to that is
provide the receiving the
individual with a money from the
loan lender
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Open-end Credit

Open-end
Characte Closed-end
(revolving)
ristics credit
credit
Credit
Definitio A one-time
extended in
n loan
advance
May be used
Purpose Specified in
for a variety
of loan application
of purposes
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Open-end Credit

Character Closed-end Open-end

istics credit credit
Varies- can be
Specified paid in one
number of payment or a
Payments
equal series of equal
payments or unequal
payments
Agreed upon May be
Loan during the increased for
Amount application responsible
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Credit Card
C

What is a credit card?

Pre-approved credit which can be used for
the purchase of goods and services now
and payment of them later
A credit cards credit limit varies
based upon an individuals
perceived creditworthiness
Credit limit is Creditworthiness is an
the maximum individuals ability and
willingness to pay the money
dollar amount back
loaned
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Credit Card
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Interest
Interest is charged each
month the balance is not
paid in full
Rate at which
interest is
charged is
referred to as:
Annual
Percentage Rate
(APR)
The cost of credit
expressed as
a yearly interest rate
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Minimum Payments
C

Required to make at least a minimum

payment each month
Usually only a small percentage (2.5-5%) of
the total balance due
Cardholders who only make the
minimum payment:
Make slow progress paying off card
balance
Pay substantially more than what was
initially charged to the card
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Minimum Payments
C

Amount
charged Time to
Total
to credit Minimu pay off Total
amount
card in APR m the amount
paid in
one payment credit paid
interest
purchas card
e
$2,000 18% $50.00 62 $1,077.2 $3,077.2
months 5 5
$500 12% $25.00 23 $60.67 $560.67
months

Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Advantages to using Credit
Cards

Advantages
Convenient payment Protection against fraud
tool Opportunity to establish
Useful for emergencies a positive credit history
Online shopping is safer
Often required to hold a than using a debit card
reservation because of the Fair Credit
Billing Act protection
Able to purchase big Possibility of receiving
ticket items and spread bonuses, such as frequent
out payments flyer miles or cash rebates

Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Disadvantages to using
Credit Cards

Disadvantages
Interest can be
costly when Responsible for lost/stolen cards
a balance is revolved
Additional Applying for multiple
penalty fees accounts can lower
may apply
Tempting to your credit score
overspend
Risk of identity
theft

Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Debit Cards
C

What is a debit card?

A plastic card which looks like a credit
card, but is electronically connected to
the cardholders bank account
Money is immediately withdrawn from
the cardholders checking account
What is the difference between
a credit card and a debit card?
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Credit History
C

Credit cards can have a positive

or negative impact on an
individuals
Credit credit history
Report
A record of a consumers credit history that includes information
about credit card use as well as the use of other types of credit,
such as auto loans, student loans and mortgage loans

Credit Score
A number that summarizes an individuals credit record and history.
It is a numeric grade of a consumers financial reliability
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Positive Credit
Card use

Helps
Proper develop Earn a high
credit card positive credit
use credit score
history
andgives
A high credit score creditthe consumer the
opportunity to havereport
lower interest rates on
loans, the privilege to use different forms
of credit, and an easier approval process
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card

for future credit

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Card Use

Examples of positive credit card

behaviors:
Paying credit card balances in full every
month
Paying credit card bills on time
Applying for only credit cards that are needed
Keeping track of all charges by keeping
receipts and using a check register
Checking the monthly credit card statement
for errors
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Negative Credit
Card Use

Develops
Improper negative Lower
credit card credit credit
use history score
and credit
Consumers with low report
credit scores have
difficulty getting loans, difficulty renting
apartments, pay higher interest rates,
pay higher insurance rates, and have
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card

difficulty obtaining a job

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Card use

Examples of negative credit card

behaviors:
Making late credit card payments
Paying only the minimum payment
Exceeding the cards credit limit
(usually triggers a penalty fee)
Charging items that cant be paid off
immediately
Owning too many credit cards
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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NO Credit
C

If an individual has not used

credit, they will not have any
information in their credit report
Not having a credit report can
cause an individual to be denied
credit

Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Credit Card Offers

C

Credit card issuers are

required to disclose the
terms and fees of credit
cards in an easy to read
box format

This is called the Schumer box

Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
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Annual Annual
Percentage
Interest Rates and Interest Charges
12.99%, 13.99% or 14.99%, introductory APR for one year, based on
your creditworthiness.

Percentage Rate Rate (APR) for

Purchases
APR for
After that, your APR will be 14.99%. This is a variable-rate APR that will
vary with the market based on the Prime Rate.
15.99%
Balance This APR will vary with the market based on the Prime Rate

(APR) for Transfers

APR for Cash
Advances
21.99%
This APR will vary with the market based on the Prime Rate

Purchases Penalty APR

and When it
Applies
28.99%
This APR may be applied to your account if you:
1.Make a late payment;
2.Go over your credit limit;

This section 3.Make a payment that is returned; or

4.Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APRs are increased

discloses the
for any of these reasons, the Penalty APR will apply until you make six
consecutive minimum payments when due.
How to Avoid Your due date is at least 25 days after the close of each billing cycle.
Paying Interest We will not charge you any interest on purchases if you pay your entire

interest paid for on Purchases

Minimum
Interest Charge
balance by the due date each month.
If you are charged interest, the charge will be no less than $1.50.

purchases on the For Credit Card To learn more about factors to consider when applying for or using a
Tips from the
Federal
credit card, visit the website of the Federal Reserve Board at
http://www.federalreserve.gov/creditcard
Reserve Board

card. Multiple Set-up and

Maintenance
Fees
NOTICE: Some of these set-up and maintenance fees will be assessed
before you begin using your card and will reduce the amount of credit

interest rates may Fees you initially have available. For example, if you are assigned the
minimum credit limit of $250, initial available credit will be only about
$209.

be listed here,
Annual Fee: $20
Account Set-up Fee: $20 (one-time fee)
Participation Fee: $12 annually ($1 per month)
Additional Card Fee: $5 annually (if applicable)

because the final Transaction

Fees

Balance Transfer: Either $5 or 3% of the amount of each
transfer, whichever is greater (maximum fee: $100)
Cash Advance: Either $5 or 3% of the amount of each cash

interest rate may

advance, whichever is greater
Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees Late Payment: $29 if balance is less than or equal to $1000
OR $35 if balance is more than $1000

depend on the

Over-the-limit: $29
Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called average daily balance
(including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR
 an introductory Annual
Interest Rates and Interest Charges
12.99%, 13.99% or 14.99%, introductory APR for one year, based on

rate it will be shown

Percentage your creditworthiness.
Rate (APR) for After that, your APR will be 14.99%. This is a variable-rate APR that will
Purchases vary with the market based on the Prime Rate.
APR for 15.99%

in this section, which Balance

Transfers
APR for Cash
This APR will vary with the market based on the Prime Rate

21.99%

is the APR charged

Advances This APR will vary with the market based on the Prime Rate
Penalty APR 28.99%
and When it This APR may be applied to your account if you:
Applies 1.Make a late payment;

during the credit 2.Go over your credit limit;

3.Make a payment that is returned; or
4.Do any of the above on another account that you have with us.

card's introductory
How long will the Penalty APR apply? If your APRs are increased
for any of these reasons, the Penalty APR will apply until you make six
consecutive minimum payments when due.
How to Avoid Your due date is at least 25 days after the close of each billing cycle.

period after a credit Paying Interest

on Purchases
Minimum
We will not charge you any interest on purchases if you pay your entire
balance by the due date each month.
If you are charged interest, the charge will be no less than $1.50.

card account is
Interest Charge
For Credit Card To learn more about factors to consider when applying for or using a
Tips from the credit card, visit the website of the Federal Reserve Board at
Federal http://www.federalreserve.gov/creditcard

opened. The card Reserve Board

Set-up and
Fees
NOTICE: Some of these set-up and maintenance fees will be assessed

will have a different

Maintenance before you begin using your card and will reduce the amount of credit
Fees you initially have available. For example, if you are assigned the
minimum credit limit of $250, initial available credit will be only about
$209.

APR after the Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)
Participation Fee: $12 annually ($1 per month)

introductory period
Additional Card Fee: $5 annually (if applicable)
What is the introductory Transaction
Fees
Balance Transfer: Either $5 or 3% of the amount of each
transfer, whichever is greater (maximum fee: $100)

rate for Cash Advance: Either $5 or 3% of the amount of each cash

Thethis
ends
introductory
credit card offer?
rate Penalty Fees


advance, whichever is greater
Foreign Transaction: 2% of each transaction in U.S. dollars
Late Payment: $29 if balance is less than or equal to $1000
OR $35 if balance is more than $1000

depends on the

Over-the-limit: $29
Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called average daily balance
creditworthiness of (including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR

the applicant, but it if you become more than 60 days late in paying your bill

will be 12.99%,
Some cards will have a
variable-rate APR,
which is an APR that Annual
Percentage
Interest Rates and Interest Charges
12.99%, 13.99% or 14.99%, introductory APR for one year, based on
your creditworthiness.

may change depending Rate (APR) for

Purchases
APR for
After that, your APR will be 14.99%. This is a variable-rate APR that will
vary with the market based on the Prime Rate.
15.99%

on other factors, such Balance

Transfers
APR for Cash
This APR will vary with the market based on the Prime Rate

21.99%

as the prime rate. The Advances

Penalty APR
and When it
This APR will vary with the market based on the Prime Rate
28.99%
This APR may be applied to your account if you:

prime rate is an index Applies 1.Make a late payment;

2.Go over your credit limit;
3.Make a payment that is returned; or

that represents the 4.Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APRs are increased
for any of these reasons, the Penalty APR will apply until you make six

interest rate most How to Avoid

Paying Interest
consecutive minimum payments when due.
Your due date is at least 25 days after the close of each billing cycle.
We will not charge you any interest on purchases if you pay your entire

banks charge their on Purchases

Minimum
Interest Charge
balance by the due date each month.
If you are charged interest, the charge will be no less than $1.50.

most credit-worthy For Credit Card To learn more about factors to consider when applying for or using a
Tips from the
Federal
credit card, visit the website of the Federal Reserve Board at
http://www.federalreserve.gov/creditcard
What is the APR for
customers Reserve Board
Fees
Purchases for this credit Set-up and
Maintenance
NOTICE: Some of these set-up and maintenance fees will be assessed
before you begin using your card and will reduce the amount of credit
Fees you initially have available. For example, if you are assigned the
card offer?
14.99% minimum credit limit of $250, initial available credit will be only about
$209.
Annual Fee: $20

Is this a variable-rate APR Account Set-up Fee: $20 (one-time fee)

Participation Fee: $12 annually ($1 per month)
Additional Card Fee: $5 annually (if applicable)
or a fixed-rate APR? Transaction
Fees
Balance Transfer: Either $5 or 3% of the amount of each
transfer, whichever is greater (maximum fee: $100)
Cash Advance: Either $5 or 3% of the amount of each cash
Variable-rate APR
advance, whichever is greater
Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees Late Payment: $29 if balance is less than or equal to $1000
OR $35 if balance is more than $1000
Over-the-limit: $29
Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called average daily balance
(including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR
 APR for Balance
Transfers
Interest Rates and Interest Charges
Annual 12.99%, 13.99% or 14.99%, introductory APR for one year, based on
Percentage your creditworthiness.

This section discloses

Rate (APR) for After that, your APR will be 14.99%. This is a variable-rate APR that will
Purchases vary with the market based on the Prime Rate.
APR for 15.99%

the interest paid for

Balance This APR will vary with the market based on the Prime Rate
Transfers
APR for Cash 21.99%

balance transfers,
Advances This APR will vary with the market based on the Prime Rate
Penalty APR 28.99%
and When it This APR may be applied to your account if you:

which is the act of

Applies 1.Make a late payment;
2.Go over your credit limit;
3.Make a payment that is returned; or

transferring debt from

4.Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APRs are increased
for any of these reasons, the Penalty APR will apply until you make six

one credit card account

consecutive minimum payments when due.
How to Avoid Your due date is at least 25 days after the close of each billing cycle.
Paying Interest We will not charge you any interest on purchases if you pay your entire

to another. Balance
on Purchases balance by the due date each month.
Minimum If you are charged interest, the charge will be no less than $1.50.
Interest Charge

transfer fees may apply,

For Credit Card To learn more about factors to consider when applying for or using a
Tips from the credit card, visit the website of the Federal Reserve Board at
Federal http://www.federalreserve.gov/creditcard

even if the balance

Reserve Board
Fees
Set-up and NOTICE: Some of these set-up and maintenance fees will be assessed
What is APR
transfer the APR for
is 0% Maintenance
Fees
before you begin using your card and will reduce the amount of credit
you initially have available. For example, if you are assigned the

balance transfers for this minimum credit limit of $250, initial available credit will be only about
$209.
Annual Fee: $20
credit card offer?
15.99% Account Set-up Fee: $20 (one-time fee)
Participation Fee: $12 annually ($1 per month)
Additional Card Fee: $5 annually (if applicable)
Transaction Balance Transfer: Either $5 or 3% of the amount of each
Fees transfer, whichever is greater (maximum fee: $100)
Cash Advance: Either $5 or 3% of the amount of each cash
advance, whichever is greater
Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees Late Payment: $29 if balance is less than or equal to $1000
OR $35 if balance is more than $1000
Over-the-limit: $29
Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called average daily balance
(including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR
 d
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dit
Cre Interest Rates and Interest Charges
Annual 12.99%, 13.99% or 14.99%, introductory APR for one year, based on
Percentage your creditworthiness.
Rate (APR) for After that, your APR will be 14.99%. This is a variable-rate APR that will
Purchases vary with the market based on the Prime Rate.
APR for 15.99%
Balance This APR will vary with the market based on the Prime Rate
Transfers
APR for Cash 21.99%
APR for Cash Advances
Penalty APR
This APR will vary with the market based on the Prime Rate
28.99%
and When it This APR may be applied to your account if you:
Advances Applies 1.Make a late payment;
2.Go over your credit limit;
3.Make a payment that is returned; or

This section discloses 4.Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APRs are increased
for any of these reasons, the Penalty APR will apply until you make six

the interest paid for How to Avoid

consecutive minimum payments when due.
Your due date is at least 25 days after the close of each billing cycle.
Paying Interest We will not charge you any interest on purchases if you pay your entire

cash advances, such as on Purchases

Minimum
balance by the due date each month.
If you are charged interest, the charge will be no less than $1.50.
Interest Charge

withdrawing cash from For Credit Card To learn more about factors to consider when applying for or using a
Tips from the credit card, visit the website of the Federal Reserve Board at
Federal http://www.federalreserve.gov/creditcard

an ATM using a credit Reserve Board

Fees

card. Cash advance fees

Set-up and NOTICE: Some of these set-up and maintenance fees will be assessed
Maintenance before you begin using your card and will reduce the amount of credit
Fees you initially have available. For example, if you are assigned the
minimum credit limit of $250, initial available credit will be only about
may also apply $209.

What is the APR for cash Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)
Participation Fee: $12 annually ($1 per month)
advances for this credit Transaction
Additional Card Fee: $5 annually (if applicable)
Balance Transfer: Either $5 or 3% of the amount of each

card offer?
21.99%
Fees

transfer, whichever is greater (maximum fee: $100)
Cash Advance: Either $5 or 3% of the amount of each cash
advance, whichever is greater
Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees Late Payment: $29 if balance is less than or equal to $1000
OR $35 if balance is more than $1000
Over-the-limit: $29
Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called average daily balance
(including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR
 Penalty APR and
When it Applies
This section discloses
the penalty APR, as well
as the penalty terms
that trigger the penalty
APR to take effect
Penalty APR is the
interest rate charged on
new transactions if the
penalty terms in the
credit card contract are
triggered
What is the Penalty APR
for this credit card offer?
21.99%
Interest Rates and Interest Charges
Annual
Percentage
Rate (APR) for
12.99%, 13.99% or 14.99%, introductory APR for one year, based on
your creditworthiness.
After that, your APR will be 14.99%. This is a variable-rate APR that will
Purchases
APR for
Balance
vary with the market based on the Prime Rate.
15.99%
This APR will vary with the market based on the Prime Rate
Transfers
APR for Cash
Advances
21.99%
This APR will vary with the market based on the Prime Rate
Penalty APR
and When it
Applies
28.99%
This APR may be applied to your account if you:
1.Make a late payment;
2.Go over your credit limit;
3.Make a payment that is returned; or
4.Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APRs are increased
for any of these reasons, the Penalty APR will apply until you make six
How to Avoid
consecutive minimum payments when due.
Your due date is at least 25 days after the close of each billing cycle.
Paying Interest We will not charge you any interest on purchases if you pay your entire
on Purchases
Minimum
Interest Charge
balance by the due date each month.
If you are charged interest, the charge will be no less than $1.50.
For Credit Card To learn more about factors to consider when applying for or using a
Tips from the
Federal
credit card, visit the website of the Federal Reserve Board at
http://www.federalreserve.gov/creditcard
Reserve Board
Fees
Set-up and NOTICE: Some of these set-up and maintenance fees will be assessed
Maintenance
Fees
before you begin using your card and will reduce the amount of credit
you initially have available. For example, if you are assigned the
minimum credit limit of $250, initial available credit will be only about
$209.
Annual Fee: $20
Account Set-up Fee: $20 (one-time fee)
Participation Fee: $12 annually ($1 per month)
Additional Card Fee: $5 annually (if applicable)
Transaction
Fees
Balance Transfer: Either $5 or 3% of the amount of each
transfer, whichever is greater (maximum fee: $100)
Cash Advance: Either $5 or 3% of the amount of each cash
advance, whichever is greater
Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees Late Payment: $29 if balance is less than or equal to $1000
OR $35 if balance is more than $1000
Over-the-limit: $29
Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called average daily balance
(including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR
 d
Car
dit
Cre Interest Rates and Interest Charges
Annual 12.99%, 13.99% or 14.99%, introductory APR for one year, based on
Percentage your creditworthiness.
Rate (APR) for After that, your APR will be 14.99%. This is a variable-rate APR that will
Purchases vary with the market based on the Prime Rate.
APR for 15.99%
Balance This APR will vary with the market based on the Prime Rate
Transfers
APR for Cash 21.99%

How To Avoid
Advances This APR will vary with the market based on the Prime Rate
Penalty APR 28.99%
and When it This APR may be applied to your account if you:

Paying
Applies 1.Make a late payment;
2.Go over your credit limit;
3.Make a payment that is returned; or

Interest on
4.Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APRs are increased
for any of these reasons, the Penalty APR will apply until you make six

Purchases
consecutive minimum payments when due.
How to Avoid Your due date is at least 25 days after the close of each billing cycle.
Paying Interest We will not charge you any interest on purchases if you pay your entire

This section explains

on Purchases balance by the due date each month.
Minimum If you are charged interest, the charge will be no less than $1.50.
Interest Charge

how you can avoid

For Credit Card To learn more about factors to consider when applying for or using a
Tips from the credit card, visit the website of the Federal Reserve Board at
Federal http://www.federalreserve.gov/creditcard

interest charges on a
Reserve Board
Fees
Set-up and NOTICE: Some of these set-up and maintenance fees will be assessed

Howcredit card
can a cardholder
Maintenance before you begin using your card and will reduce the amount of credit
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minimum credit limit of $250, initial available credit will be only about

avoid paying interest on a $209.

Annual Fee: $20
Account Set-up Fee: $20 (one-time fee)
creditcredit
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Additional Card Fee: $5 annually (if applicable)
Transaction Balance Transfer: Either $5 or 3% of the amount of each
bills in full by the due Fees

transfer, whichever is greater (maximum fee: $100)
Cash Advance: Either $5 or 3% of the amount of each cash

date
advance, whichever is greater
Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees Late Payment: $29 if balance is less than or equal to $1000
OR $35 if balance is more than $1000
Over-the-limit: $29
Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called average daily balance
(including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR
 d
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Cre Interest Rates and Interest Charges
Annual 12.99%, 13.99% or 14.99%, introductory APR for one year, based on
Percentage your creditworthiness.
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Minimum Interest
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Transfers

Charge
APR for Cash 21.99%
Advances This APR will vary with the market based on the Prime Rate
Penalty APR 28.99%

Credit card
and When it This APR may be applied to your account if you:
Applies 1.Make a late payment;
2.Go over your credit limit;

companies often have

3.Make a payment that is returned; or
4.Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APRs are increased

a minimum interest
for any of these reasons, the Penalty APR will apply until you make six
consecutive minimum payments when due.
How to Avoid Your due date is at least 25 days after the close of each billing cycle.

amount. These
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on Purchases balance by the due date each month.
Minimum If you are charged interest, the charge will be no less than $1.50.

charges typically
Interest Charge
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Tips from the credit card, visit the website of the Federal Reserve Board at

range from $0.50 to

Federal http://www.federalreserve.gov/creditcard
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$2 per month and are

Set-up and NOTICE: Some of these set-up and maintenance fees will be assessed
Maintenance before you begin using your card and will reduce the amount of credit
Fees you initially have available. For example, if you are assigned the

disclosed in this
minimum credit limit of $250, initial available credit will be only about
$209.
Annual Fee: $20

section of the credit

Account Set-up Fee: $20 (one-time fee)
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card offerfor this

Transaction Balance Transfer: Either $5 or 3% of the amount of each

interest charge Fees

transfer, whichever is greater (maximum fee: $100)
Cash Advance: Either $5 or 3% of the amount of each cash
advance, whichever is greater
credit card?
$1.50 Penalty Fees


Foreign Transaction: 2% of each transaction in U.S. dollars
Late Payment: $29 if balance is less than or equal to $1000
OR $35 if balance is more than $1000
Over-the-limit: $29
Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called average daily balance
(including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR
 d
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Cre Interest Rates and Interest Charges
Annual 12.99%, 13.99% or 14.99%, introductory APR for one year, based on
Percentage your creditworthiness.
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Purchases vary with the market based on the Prime Rate.
APR for 15.99%
Balance This APR will vary with the market based on the Prime Rate
Transfers
APR for Cash 21.99%
Advances This APR will vary with the market based on the Prime Rate
Penalty APR 28.99%
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Applies
This APR may be applied to your account if you:
1.Make a late payment;
2.Go over your credit limit;
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4.Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APRs are increased

Federal Reserve for any of these reasons, the Penalty APR will apply until you make six
consecutive minimum payments when due.
How to Avoid Your due date is at least 25 days after the close of each billing cycle.
Board Paying Interest
on Purchases
We will not charge you any interest on purchases if you pay your entire
balance by the due date each month.
Minimum If you are charged interest, the charge will be no less than $1.50.
This section directs Interest Charge
For Credit Card To learn more about factors to consider when applying for or using a
Tips from the credit card, visit the website of the Federal Reserve Board at
consumers to the Federal
Reserve Board
http://www.federalreserve.gov/creditcard

Fees
Federal Reserve Set-up and
Maintenance
NOTICE: Some of these set-up and maintenance fees will be assessed
before you begin using your card and will reduce the amount of credit

website to obtain
Fees you initially have available. For example, if you are assigned the
minimum credit limit of $250, initial available credit will be only about
$209.
Annual Fee: $20
more information Account Set-up Fee: $20 (one-time fee)
Participation Fee: $12 annually ($1 per month)
Additional Card Fee: $5 annually (if applicable)
about credit cards Transaction
Fees
Balance Transfer: Either $5 or 3% of the amount of each
transfer, whichever is greater (maximum fee: $100)
Cash Advance: Either $5 or 3% of the amount of each cash
advance, whichever is greater
Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees Late Payment: $29 if balance is less than or equal to $1000
OR $35 if balance is more than $1000
Over-the-limit: $29
Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called average daily balance
(including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR
 Maintenance Fees
This section discloses
any set-up and Annual
Percentage
Interest Rates and Interest Charges
12.99%, 13.99% or 14.99%, introductory APR for one year, based on
your creditworthiness.

maintenance fees for Rate (APR) for

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vary with the market based on the Prime Rate.
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the card, which can Balance

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include annual fees, Advances

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account set-up fees, Applies 1.Make a late payment;

2.Go over your credit limit;
3.Make a payment that is returned; or

participation fees, 4.Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APRs are increased
for any of these reasons, the Penalty APR will apply until you make six

and additional card How to Avoid

Paying Interest
consecutive minimum payments when due.
Your due date is at least 25 days after the close of each billing cycle.
We will not charge you any interest on purchases if you pay your entire

fees on Purchases
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balance by the due date each month.
If you are charged interest, the charge will be no less than $1.50.

For Credit Card To learn more about factors to consider when applying for or using a
Tips from the credit card, visit the website of the Federal Reserve Board at
Annual fee is a Federal
Reserve Board
http://www.federalreserve.gov/creditcard

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yearly fee that may Set-up and
Maintenance
NOTICE: Some of these set-up and maintenance fees will be assessed
before you begin using your card and will reduce the amount of credit

beWhat
charged for having
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is the annual fee minimum credit limit of $250, initial available credit will be only about
$209.
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credit card? Account Set-up Fee: $20 (one-time fee)
Participation Fee: $12 annually ($1 per month)
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$20 Fees

transfer, whichever is greater (maximum fee: $100)
Cash Advance: Either $5 or 3% of the amount of each cash
advance, whichever is greater
Foreign Transaction: 2% of each transaction in U.S. dollars
Penalty Fees Late Payment: $29 if balance is less than or equal to $1000
OR $35 if balance is more than $1000
Over-the-limit: $29
Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called average daily balance
(including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR
 d
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Cre Interest Rates and Interest Charges
Annual 12.99%, 13.99% or 14.99%, introductory APR for one year, based on
Percentage your creditworthiness.
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APR for 15.99%
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Transcation Fees
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This section discloses

Penalty APR 28.99%
and When it This APR may be applied to your account if you:
Applies 1.Make a late payment;

any transaction fees

2.Go over your credit limit;
3.Make a payment that is returned; or
4.Do any of the above on another account that you have with us.

for the card, which

How long will the Penalty APR apply? If your APRs are increased
for any of these reasons, the Penalty APR will apply until you make six
consecutive minimum payments when due.

can include balance

How to Avoid Your due date is at least 25 days after the close of each billing cycle.
Paying Interest We will not charge you any interest on purchases if you pay your entire
on Purchases balance by the due date each month.

transfer fees, cash

Minimum If you are charged interest, the charge will be no less than $1.50.
Interest Charge
For Credit Card To learn more about factors to consider when applying for or using a

advance fees, and

Tips from the credit card, visit the website of the Federal Reserve Board at
Federal http://www.federalreserve.gov/creditcard
Reserve Board

foreign transaction Set-up and

Maintenance
Fees
NOTICE: Some of these set-up and maintenance fees will be assessed
before you begin using your card and will reduce the amount of credit

fees
What is the fee for cash
Fees you initially have available. For example, if you are assigned the
minimum credit limit of $250, initial available credit will be only about
$209.

advances for this card? Annual Fee: $20

Account Set-up Fee: $20 (one-time fee)
Participation Fee: $12 annually ($1 per month)
$5 or 3% of the Transaction
Additional Card Fee: $5 annually (if applicable)
Balance Transfer: Either $5 or 3% of the amount of each

amount of each Fees

transfer, whichever is greater (maximum fee: $100)
Cash Advance: Either $5 or 3% of the amount of each cash
advance, whichever is greater
cash advance Penalty Fees


Foreign Transaction: 2% of each transaction in U.S. dollars
Late Payment: $29 if balance is less than or equal to $1000

(whichever is
OR $35 if balance is more than $1000
Over-the-limit: $29
Returned Payment: $35
greater) * How We Will Calculate Your Balance: We use a method called average daily balance
(including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR
 the penalty fees for
the card, which can
include late-payment, Interest Rates and Interest Charges

over-the-limit, and
Annual 12.99%, 13.99% or 14.99%, introductory APR for one year, based on
Percentage your creditworthiness.
Rate (APR) for After that, your APR will be 14.99%. This is a variable-rate APR that will
Purchases vary with the market based on the Prime Rate.
returned payment APR for
Balance
15.99%
This APR will vary with the market based on the Prime Rate
Transfers
fees APR for Cash
Advances
21.99%
This APR will vary with the market based on the Prime Rate
Penalty APR 28.99%
and When it This APR may be applied to your account if you:

Late payment fee Applies 1.Make a late payment;

2.Go over your credit limit;
3.Make a payment that is returned; or

is charged when a 4.Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APRs are increased
for any of these reasons, the Penalty APR will apply until you make six

cardholder does not How to Avoid

Paying Interest
consecutive minimum payments when due.
Your due date is at least 25 days after the close of each billing cycle.
We will not charge you any interest on purchases if you pay your entire

make the minimum on Purchases

Minimum
Interest Charge
balance by the due date each month.
If you are charged interest, the charge will be no less than $1.50.

monthly payment by For Credit Card To learn more about factors to consider when applying for or using a
Tips from the
Federal
credit card, visit the website of the Federal Reserve Board at
http://www.federalreserve.gov/creditcard

the due date Reserve Board

Fees
Set-up and NOTICE: Some of these set-up and maintenance fees will be assessed
Over-the-limit fee Maintenance
Fees
before you begin using your card and will reduce the amount of credit
you initially have available. For example, if you are assigned the
minimum credit limit of $250, initial available credit will be only about

is charged if the $209.

Annual Fee: $20
Account Set-up Fee: $20 (one-time fee)

account balance goes

Does this card have an
Participation Fee: $12 annually ($1 per month)
Additional Card Fee: $5 annually (if applicable)
Transaction Balance Transfer: Either $5 or 3% of the amount of each

overover-the
the setlimit
credit
fee?
Fees

transfer, whichever is greater (maximum fee: $100)
Cash Advance: Either $5 or 3% of the amount of each cash
advance, whichever is greater

limit
Yes, the over-the-limit Penalty Fees


Foreign Transaction: 2% of each transaction in U.S. dollars
Late Payment: $29 if balance is less than or equal to $1000
OR $35 if balance is more than $1000
fee is $29.

Over-the-limit: $29
Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called average daily balance
(including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR
 d
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dit
Cre Interest Rates and Interest Charges
Annual 12.99%, 13.99% or 14.99%, introductory APR for one year, based on
Percentage your creditworthiness.
Rate (APR) for After that, your APR will be 14.99%. This is a variable-rate APR that will
Purchases vary with the market based on the Prime Rate.
APR for 15.99%

How we calculate Balance

Transfers
This APR will vary with the market based on the Prime Rate

APR for Cash 21.99%

your balance Advances

Penalty APR
This APR will vary with the market based on the Prime Rate
28.99%
and When it This APR may be applied to your account if you:

Credit card Applies 1.Make a late payment;

2.Go over your credit limit;
3.Make a payment that is returned; or

companies can use 4.Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APRs are increased
for any of these reasons, the Penalty APR will apply until you make six

one of several How to Avoid

Paying Interest
consecutive minimum payments when due.
Your due date is at least 25 days after the close of each billing cycle.
We will not charge you any interest on purchases if you pay your entire

methods to calculate on Purchases

Minimum
Interest Charge
balance by the due date each month.
If you are charged interest, the charge will be no less than $1.50.

the outstanding For Credit Card To learn more about factors to consider when applying for or using a
Tips from the
Federal
credit card, visit the website of the Federal Reserve Board at
http://www.federalreserve.gov/creditcard

balance on a credit Reserve Board

Fees
Set-up and NOTICE: Some of these set-up and maintenance fees will be assessed
card. The method Maintenance
Fees
before you begin using your card and will reduce the amount of credit
you initially have available. For example, if you are assigned the
minimum credit limit of $250, initial available credit will be only about

used is disclosed
What method is usedinto
$209.
Annual Fee: $20
Account Set-up Fee: $20 (one-time fee)

this section
calculate the balance on Participation Fee: $12 annually ($1 per month)
Additional Card Fee: $5 annually (if applicable)
Transaction Balance Transfer: Either $5 or 3% of the amount of each

Averagethis card?
daily balance Fees

transfer, whichever is greater (maximum fee: $100)
Cash Advance: Either $5 or 3% of the amount of each cash
advance, whichever is greater
(including new Penalty Fees


Foreign Transaction: 2% of each transaction in U.S. dollars
Late Payment: $29 if balance is less than or equal to $1000

purchases)
OR $35 if balance is more than $1000
Over-the-limit: $29
Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called average daily balance
(including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR
 Loss of Annual
Interest Rates and Interest Charges
12.99%, 13.99% or 14.99%, introductory APR for one year, based on
Percentage your creditworthiness.
Introductory APR Rate (APR) for
Purchases
After that, your APR will be 14.99%. This is a variable-rate APR that will
vary with the market based on the Prime Rate.
APR for 15.99%
If the card has an Balance
Transfers
This APR will vary with the market based on the Prime Rate

APR for Cash 21.99%

introductory rate, this Advances
Penalty APR
This APR will vary with the market based on the Prime Rate
28.99%
and When it This APR may be applied to your account if you:
area will list how the Applies 1.Make a late payment;
2.Go over your credit limit;
3.Make a payment that is returned; or
lower introductory 4.Do any of the above on another account that you have with us.
How long will the Penalty APR apply? If your APRs are increased
for any of these reasons, the Penalty APR will apply until you make six

rate can be lost How to Avoid

consecutive minimum payments when due.
Your due date is at least 25 days after the close of each billing cycle.
Paying Interest We will not charge you any interest on purchases if you pay your entire

How can the introductory on Purchases

Minimum
balance by the due date each month.
If you are charged interest, the charge will be no less than $1.50.
Interest Charge
APR be lost on this card? For Credit Card To learn more about factors to consider when applying for or using a
Tips from the credit card, visit the website of the Federal Reserve Board at
Federal http://www.federalreserve.gov/creditcard
If the cardholder is Reserve Board
Fees
more than 60 days Set-up and
Maintenance
NOTICE: Some of these set-up and maintenance fees will be assessed
before you begin using your card and will reduce the amount of credit
Fees you initially have available. For example, if you are assigned the
late in paying the bill minimum credit limit of $250, initial available credit will be only about
What APR will the $209.
Annual Fee: $20

cardholder be charged Account Set-up Fee: $20 (one-time fee)

Participation Fee: $12 annually ($1 per month)
Additional Card Fee: $5 annually (if applicable)
if the introductory rate Transaction
Fees
Balance Transfer: Either $5 or 3% of the amount of each
transfer, whichever is greater (maximum fee: $100)

is lost?APR of
The Penalty

Cash Advance: Either $5 or 3% of the amount of each cash
advance, whichever is greater
Foreign Transaction: 2% of each transaction in U.S. dollars

28.99%
Penalty Fees Late Payment: $29 if balance is less than or equal to $1000
OR $35 if balance is more than $1000
Over-the-limit: $29
Returned Payment: $35
* How We Will Calculate Your Balance: We use a method called average daily balance
(including new purchases).
* Loss of Introductory APR- We may end your introductory APR and apply the Penalty APR
 1.4.1.G1
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Credit Card Benefits

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Research benefits that may be received

from the card
Cash rebates
Warranties for items purchased with the card
Travel accident insurance
Frequent flyer miles
Make sure to know all terms and
conditions of card benefits
Cards that offer benefits may charge fees
or higher interest rates
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona
 1.4.1.G1

Receiving a
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Credit Card

1. Compare credit card offers and

determine which card to apply for
2. Complete a credit application
A form requesting information about
a persons ability to repay and the
applicants age
Can be completed through the mail,
the internet or over the phone

Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona
 1.4.1.G1

Receiving a
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Credit Card

3. Lenders conduct a credit

investigation
A comparison of information on credit
application to information on a credit
report
4. Applicants may or may not be
approved for the card they apply for
Approval depends on the applicant's
credit history
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona
 1.4.1.G1

Pre-Approved Credit Card

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Applications

Credit card companies send pre-

approved credit card
applications in the mail
If an individual is pre-approved for that
particular card, they have passed the
initial credit check

Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona
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Credit Card Statements

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Credit card statements outline

important information about the
card
The 2009 CARD Act required
credit card companies to include
specific information about
Andrews Credit Card Statement
a card
account inAndrew
Please help the statement
interpret his credit card
statement.
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona
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Cardholder Protections
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& Rights

Limits liability for

unauthorized credit card
charges to $50.00 per
Must write a letter within
60 days ofcard
the first bill
containing the error
If a credit card number is used
fraudulently but the card itself was
not used, the individual has no
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona
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Cardholder Protections
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& Rights

2009 CARD Act

To receive a credit card, consumers must be
21 years of age or older
Consumers under 21 have to either have a co-
signer or show documentation of sufficient
income to make payments
If someone agrees to be a co-signer on an
account, they are equally responsible for the loan
Interest rates on existing balances generally
cant be raised unless a cardholder is 60
days or more past due
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona
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Cardholder Protections
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& Rights

2009 CARD Act

Must be notified of any significant changes
in rates and fees at least 45 days before
the changes take effect
Any changes made to an account can only apply
to future transactions (new charges)
Have the option of closing the account before
the changes go into effect
Cardholders now have to opt-in to
allowing transactions that take them over
their credit limit
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona
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Cardholder Protections
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& Rights

2009 CARD Act

Credit card issuers are required to
send a monthly statement at least
21 days before a credit card
payment is due
Credit card payment due dates
must be consistent month to month
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona
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Cardholder Protections
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& Rights

2009 CARD Act

Credit card companies cannot increase
rates for the first 12 months after an
account is open unless:
The card has a variable interest rate
The cardholder is more than 60 days late in
paying their bill
The card has an introductory rate (the
introductory rate must be in place for at least 6
months and then the rate can increase)
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona
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Cardholder Protections
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& Rights

2009 CARD Act

Some set-up and maintenance fees are
charged before the card is used
This may reduce the amount of credit initially
available
These non-penalty fees cannot exceed 25% of the
initial credit limit
For example, if a card has a credit limit of $1,000 the
total fees for the first year (not including penalty
fees) cannot exceed $250
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona
 1.4.1.G1

Credit Card
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Safety Tips

Do not leave Close

Sign card cards lying unwanted
with a around, and accounts by
signature and report lost or writing and
Please see stolen cards phone, then
ID promptly cut up
Do not give Keep a list of Shred allthe
pre-
out account all cards, cardcredit
approved
numbers account card offers,
unless making numbers, and applications, or
a purchase phone lists solicitations
separate from
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona
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Online Shopping Safety

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Tips

1. Use a temporary credit card number

This is a one-time use only number
A set amount will be charged to your
credit card
Then a number will be given to you to do
your shopping
2. Use a credit card rather than a debit
card
Fair Credit Billing Act
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona
 1.4.1.G1
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Fair Credit Billing Act

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Helps to protect consumers while using a

credit card to make purchases
Allows the consumer to not pay for a
product or service for which the consumer
has a complaint
If products are not delivered or if it is not
what the consumer requested, any amount
of money that was credited to the card
above the $50.00 fee that consumers are
responsible for will be issued back
Debit cards do not have the same protection
Family Economics & Financial Education Updated March 2010 Credit Unit Understanding a Credit Card
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University
of Arizona