7 21 2015

Instructional Media

Center

10 Key Facts about Credit Cards

5464 1234 5678 9001

RINGGOLD P. ATIENZA Date:

Misamis University

Philippines

INTEREST RATES AROUND THE WORLD

42%

13%

34%

15%

25%

18%

Malaysia

USA

Hongkong

China

Singapore

Fact

#

1

Fact

#

2

Credit cards stimulates spending

=More More

EXPENSE

Fact

#

3

Credit cards facilitates debt like no other else

1 OUT OF 10

FILIPINOSDEFAULT

On Their

Fact

#

4

DEBT

is 3X higher

to other Asian countries

compared default rate

Our

How can we minimize ourcredit card fees?

Shop around for the best dealAvoid cash advancesPay your debt by the due dateAs much as possible, pay in full

Majority of cardholders in

Ozamiz City

do not pay in full

Fact

#

5

Paying only the minimum amount can take a decade

Fact

#

6

How long does it take to pay offyour credit card?

If you only pay the minimum

PHP10,000

2 years and 11 monthsTOTAL INTEREST: PHP 7,500

PHP50,000

11 years and 8 monthsTOTAL INTEREST: PHP 100,546

PHP100,000

15 years and 8 monthsTOTAL INTEREST: PHP 217,498

Assuming we use 3.5 interest rate and 5% or 500 minimum payment

One Decadewould be?

If you only pay the minimum

PHP25,000TOTAL INTEREST: PHP 47,987

Which two demographic

typesare the most likely to become

risky cardholders

?

Fact

#

7

1

2

Fact

#

8

Credit card debt was reported to be one of the highest stressor that could lead to lower psychological being

Fact

#

9

Credit card companies make money in four ways

How do credit companies make money?

Fees1 a. Annual fee (P600 to P5,000)b. Cash advance fee (1% to 6%)c. Late payment fee (3.9% to 7.5%)d. Excess limit fee (P120 to P500)e. Varying fee for card replacement

2 Interest on Outstanding Balancea. 2% to 3.5%

3Transaction fee (Charge to merchant)a. 1% to 5.0%

4Customer list monetizationa. e.g. rent / sale of mailing list

Fact

#

10

Regulatory environment for credit cards needs a lot of improvement

Global Information Technology Report 2013

Regulatory environment index

ID MY PH SG TH VN

82

24

98

1

81 85

Thank you!

For listening