Credit Cards Facts Activity

"If you make just the minimum payment, you have effectively DOUBLED your purchase price." Manisha Thakor

Directions: Use the links on The Mint.org and PBS's Credit Card site to derive the answers to the questions. Answer sheet.

1. Write 3 advantages of credit cards.

a.

b.

c.

2. Write 3 disadvantages of credit cards.

a.

b.

c.

3. Find Out:

Should you sign up for a card that charges an annual fee? Explain.

Some people think more is always better. Do you want a high interest rate on a credit card or a low one? Explain.

What happens if you do not pay the payment on time?

Why should you investigate the regular interest rate of the card along with the introductory offer?

4. I paid how Much? Write the answers to the 2 questions on the web page.

Calculate: You paid much more for the $2000 worth of items because you paid them off, over a long time.
Write as a percentage how much more you paid.

5. What is Your Credit Card I.Q.? Write your score.

6. Write four questions to ask yourself before buying something on a credit card.

a.

b.

c.

d.

7. Do What Kind of Spender Are You? Write your result.

8. What factors go into calculating a credit score? Second info source Your Credit Score

9. Things are slow at work. You get 5 less hours this week. You are short when your car payment is due.
You pay it a week later. How will this impact your credit card's default interest rate?

10. Take the Spending Challenge. How did you do?

11. Debit card hold - What you risk by using debit card at the pump. Why should you pay cash for your gas.?

Credit Card Executives Tough Out Senate Hearing - Watch the Senate Committee hearing Credit Card Practices

Ouch! 90 million Americans carry an average of $8000 in debt from month to month. On average Americans each have $2000 in credit card debt.

Join the deadbeats - (Credit card company slang for people who pay off the balance in full each month).
55 million Americans pay off their credit card balances in full each month. We are laughing all the way to the bank!

Best choice - Pay with cash. Go to the "Mac machine" at your bank. Withdraw an amout you believe will be enough for your purchases. If you are short, you can pay cash and use the credit card or debit card to cover the difference out of your checking account. You will be more conscious of your spending. You will be less likely to overspend or impulse buy. Did you know the credit card companies charge the merchant a fee for each purchase? By paying cash you help the local merchants by increasing their bottom line without increasing your costs! The credit card and mac debit companies keep the data about what you buy. They sell this information about you. Paying cash - Protects your privacy.

To do -

Read this article - Life without plastic CNN Money 6/17/08

Explain the effect credit cards have on users.

Watch Credit Scoring System and Credit Scores testimony video at CSPAN.

Name three mistakes consumers make that hurt their credit score.

How does a poor credit score impact the price you pay for things?

Read this New York Times editorial - Curbing Credit Card Predators - 12/26/08

Respond with your own opinion piece that is rich in the knowledge you have gained
by competing this activity and your own experience.

Debit card or credit card? Here are the pros and cons - USAToday.com 8/28/09

Cash, check, debit card or credit card. Which is the best choice for you?

Watch Senate Hearing on Credit Card Practices (12/04/2007) on CSpan.org (Search the archives to find the video)
Consider - Credit Cards: Battle in Congress by Jessica Silver-Greenberg, BusinessWeek 12/04/07

Make a 3 point - self defense tip sheet for credit cards users.

Challenges: