get smart about credit all credit products subject to qualification. © 2011, 2013 wells fargo bank,...

Get Smart About Credit

All credit products subject to qualification.© 2011, 2013 Wells Fargo Bank, N.A. All rights reserved. Member FDIC.

Please note: this presentation cannot be altered in any way without first contacting Regional Marketing. IN PERSON PRESENTATIONS ONLY.

Keeping Promises Think about a time when you let someone borrow

something.

Did the person give it back? Did you have an agreement

about when you would get the item back?

What would you think about that person if they returned your

item damaged or never returned it at all?

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It’s all about responsibility!

The Get Smart About Credit October initiative hosted annually by the American Bankers Association promotes financial education and helps bring credit awareness to your community. This presentation today is provided by Wells Fargo as part its participation in the Get Smart About Credit initiative.

Credit

The ability to borrow

money from a lender

with the promise to pay

the money back.

rest Most lenders charge a

fee for the privilege of

borrowing money. This

fee is called interest.

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Borrowing Money Credit is a privilege—and it’s granted only to those who have

demonstrated their ability to manage their money over time.

This is called credit history.

Building good credit is key to getting things you want like a

car, a college education, or a house.

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Credit Cards

It is a Loan -Using a credit card is like getting a short term

loan from a bank. You must pay the money back.

APR- The interest rate on a credit card is called an “annual

percentage rate” or APR.

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Never use credit to purchase

items you really can’t afford.

Credit Card basics

Credit Limit = this is the

maximum amount you

can borrow.

Balance = the amount

you still owe.

Know your credit limit

and balance

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Practice

1. You charge $100 on a credit card that has a limit of $300.

The card has an annual percentage rate of 18%. How long

will it take you to pay off the total charge if you pay $20 a

month?

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Practice

2. At 18% a year, what will the interest be on the unpaid $80

balance at the end of the first month?

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Practice

3. On the $100 charge, how much will your outstanding

balance be a the end of the first month, if you only make a

payment of $5?

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Practice

4. Angie is buying an MP3 player for $199 plus 6.5% sales tax.

She decides to pay for it in 2 equal installments on her credit

card over 2 months. If the interest on the credit card is 18%

a year, Angie will pay $4.82 in interest. What is the real cost

of the MP3 player to Angie?

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Practice

5. Uh oh – Angie neglected to make her payment on time. As a

result, the bank charged her a $20 late fee. Therefore, the

total amount Angie ended up paying the bank was $238.94.

Had she paid cash, the MP3 player would have cost her

$211.94. How much did using a credit card cost her?

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Personal Responsibility

Taking personal

responsibility means

keeping your promise

to pay back the money

you owe.

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To learn more about money, visit www.handsonbanking.org