Here is the assignment you will be expected to:

 

• Define credit cards. Explain to someone from another planet

• Explain how they are used. Another Planet as well

• Identify the advantages of credit cards. Minimum of 5

• Describe how a person acquires a credit card. Steps

• Define interest rates and how they work with credit cards.

• Describe credit card fees.

• Review the risks associated with credit cards, including what happens when only the minimum amount is paid each month. Minimum of 6 risks

• Introduce credit scores and how credit cards influence these scores.

• Include any additional information that students think is important. For example, they might:

  • List best practices for using credit cards and common ways they are misused. Minimum of 6 misuses or abuses

  • Explore the differences between a debit card and a credit card.

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    What I will be looking for on your report/Presentation

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• Define credit cards.

  • Plastic cards that allow you to buy goods or services on loan from a bank or store.

• Explain how they are used.

  • To purchase items in stores.

  • For online purchases.

  • To get points toward "rewards" such as discounted airline fares.

  • For cash advances.

  • For checks that can be written against the credit card account.

• Credit card facts.

  • The lender puts a ceiling on the amount you can borrow. The ceilings vary widely and can be raised if you are a good payer.

  • Payments are due monthly against the total balance (unpaid balance from previous month + interest on unpaid balance + new purchases).

• Identify the advantages of credit cards.

  • Allow you to avoid carrying a lot of cash.

  • Let you borrow money to pay for items that you currently cannot afford.

• Describe how a person acquires a credit card.

  • What do you have to prove to the lender?

  • How does the lender check on your information?

• Review the risks associated with credit cards.

  • Each time the bill is not paid in full, an interest charge is added to the balance. Over time the bill can grow to become very large, especially if new purchases are added.

  • When you buy an item on credit, you are actually paying more than the price tag unless you pay the full bill each month. Even then you are likely paying a yearly fee for the credit card.

  • Interest rates on credit cards range dramatically. Also, many credit cards offer "teaser" rates, which are low rates that last only for 6 or 12 months. Sometimes people don't notice when the teaser rates expire and their interest charges jump.

  • Cards can be lost or stolen, leading in the worst case to identity theft.

  • If you cannot pay your monthly bill, your credit rating may be damaged.

• Define interest rates and how they work with credit cards.

  • Very generally, no interest is charged on a purchase until the next billing cycle begins. This "grace period" means that, if you pay your full balance each month, you will not be charged any interest. However, exceptions exist.

  • If you don't pay your full balance, the interest is added to what you owe. If you keep paying only a minimum amount each month, over time the interest charges will make your balance grow even if you don't use the card at all.

  • The Credit Card Act of 2009 requires that "teaser" rates stay in effect at least 6 months.

• Describe credit card fees.

  • How do you learn what your card's fee is?

  • No-fee "teasers"—does a fee kick in later?

• Introduce credit scores and how credit cards influence these scores.

  • What is a credit score?

  • How do credit cards affect credit scores positively and negatively?

    Topics for further discussion and possible bonus awards

• Students may wish to create a simulation showing how interest rates and fees cause an unpaid balance to swell in comparison with the total cost for the same purchases if the bill is paid off monthly.

• List best practices for using a credit card, compared to common pitfalls.

• Explain the cost to a business that accepts credit cards.

  • Transaction fees.

  • Why would a business set a minimum purchase requirement for accepting credit cards?

  • Why do some businesses refuse to accept credit cards, and why do some accept only certain types of cards?

• Discuss whether it is necessary to have multiple credit cards.