CREDIT PART 4THE LAST

POWERPOINT!

Mr. Stasa – W-E City Schools ©

SCHEDULE FOR THE REST OF THE SEMESTER:

Today: Finish the Credit Unit (Part 4) Next week: review for the final exam Seniors next week:

Final exam periods 1-4 Wednesday, May 27 Final exam periods 5-8 Thursday, May 28

Underclassmen: Tuesday, June 2 Kahoot review game Final exam periods 1-3 Wednesday, June 3 Final exam periods 4-6 Thursday, June 4 Final exam periods 7-8 Friday, June 5

Use your

study guides

to study!

THE SCHUMER BOX The Federal Truth and Lending Act requires all

credit card companies provide a listing of terms and fees in an easy-to-read box on every credit application referred to as the Schumer Box. Items listed include: Annual fee Annual percentage rate (APR) Other APRs (balance transfer, cash advances) Grace period Finance calculation method Other transaction fees (late payments,

exceeding credit limit fee)

MINIMUM WAGE UPDATE!

On January 1, 2015 the Ohio minimum wage increased $0.15 from $7.95 to $8.10 per hour.

The U.S. Federal minimum wage remains at $7.25 per hour

IS NEGATIVE INFO THE ONLY DATA REPORTED TO CREDIT BUREAUS?

No. Both positive and negative credit information is reported to credit bureaus. Negative credit information will remain on a

credit report for up to 7 years. Positive credit information will remain on a

credit report for as long as the account is open.

Closed accounts in good standing will remain on a credit report for up to 10 years.

Bankruptcy will remain on a credit report for 10 years

BESIDES BEING DENIED CREDIT, WHAT OTHER IMPACTS CAN NEGATIVE INFORMATION ON MY CREDIT REPORT HAVE?

Auto insurance rates can be higher Denied employment Denied certain utilities Denied housing

REVIEW-ish

WHAT CAN I DO WHEN I’M 18 TO START BUILDING A CREDIT HISTORY?

Place your cell phone account into your name Open a bank or credit union account Take out a very small affordable loan from your bank

or credit union and pay it off quickly ($1,000 minimum in most cases)

Open a secured credit card

A secured credit card allows a person at least 18 years old to load money onto a prepaid credit card and use it for daily purchases. The consumer cannot spend more than what’s

loaded on the card. You do not have to have good credit to be

approved. A small monthly fee may apply (approx. $3.00)

EVEN FEDERAL

STUDENT LOANS CAN

ESTABLISH CREDIT

HISTORY

https://www.youtube.com/watch?v=EV-fF_tQDXg

CAN ANYONE WHO’S 18 OPEN THEIR OWN CREDIT CARD BY THEMSELVES?

No. Due to the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (Credit Card Act) anyone under the age of 21 will require a co-signer OR prove they have sufficient income to make payments.

A co-signer will be equally responsible for any unpaid debts or fees.

Any negative activity on the account will equally affect the co-signer’s credit score and credit report.

CAN A PERSON EVER HAVE TOO MUCH CREDIT EVEN IF THEY HAVE A GOOD CREDIT SCORE?

Yes. Having too much credit of any credit type can make you appear too risky to a lender.

You should try to have equal types of credit (revolving, open, and installment)

Having a lot of credit in good standing will not have a negative impact on your credit score.

WHAT IS A GOOD INTEREST RATE TO HAVE ON A CREDIT CARD?

The interest rate that credit card companies charge their customers is called APR (annual percentage rate).

The average credit card interest rate is 18%

Credit union credit cards have APR rates on average of 7% and cannot be higher than 18%.

ONCE AN UNPAID DEBT FALLS OFF OF MY CREDIT REPORT, AM I STILL REQUIRED TO PAY IT? Ohio’s statute of limitations states that creditors

cannot take legal action (sue) to demand payment after 6 years of unpaid debt.

Once a debt falls off of your credit report after 7 years, some creditors may try to convince you to make payments on an old debt

It is illegal for an old debt to reappear on your credit report after 7 years UNLESS you make arrangements with a creditor to resume making payments

Debt can be re-aged once it falls off your credit IF you agree to repay it. It will then legally reappear on your credit report.

Debt never goes away until it is repaid.

DOES MAINTAINING A BALANCE ON MY CREDIT CARD HURT MY CREDIT EVEN IF I MAKE THE REQUIRED MINIMUM PAYMENTS? Credit bureaus separate card users into revolvers

and transactors. A revolver is a card user who maintains a balance on

their credit card by only making the minimum payments.

A transactor is a card user who always pays their balance off at each billing cycle.

Transactors are viewed more positively by lenders and credit card companies than revolvers.

Your credit score will increase if you are a transactor

http://www.fox10phoenix.com/story/24131359/credit-bureaus-discuss-new-credit-score-formula