credit: be a financial genius
DESCRIPTION
This presentation is to help college students understand credit and learn the advantages and disadvantages of it.TRANSCRIPT
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CreditBe a
financialgenius.
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Advantages of credit
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Get it now
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No cash… No problem.
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Keeps records
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Easy
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Consolidates
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Disadvantages of credit
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Interest & fees
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Financial difficulties
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Impulse buying
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The Four “C’s” of Credit
1. Character
2. Capital
3. Collateral
4. Capacity
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Types and sources of credit
❶Single Payment
❸Revolving
❷Installment
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Using Credit Responsibly
❶ Borrow only what you can repay
❷ Pay on time
❺ Don’t share your information
❹ Report lost or stolen credit cards
❸ Keep creditors in the loop
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Building Credit
❶ Steady work
❷ Pay your existing bills
❺ Credit card or small loan
❹ Clean checking account
❸ Grow Savings
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20 - 10
Rule of:
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Rule: Never borrow more than 20% of Net Income.
Example:
$4,800 X 20% = $960
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Rule: Monthly payments shouldn’t exceed 10% of
monthly Net Income.
Example:
$4,800 X 10% = $480
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House payment should not
be counted.
Exception:
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Compound interest is theeighth wonder of the world.
He who understands it
Earns it.
He who doesn’t
Pays it.
--Albert Einstein(Financial Genius)
Compound Interest
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Payment35%
Amount Owed30%
Length of Credit History
15%
New Credit10%
Types of Credit Used10%
Credit Scores
A+ABCDF
======
780 – 850 720 – 779660 – 719 560 – 659 500 – 559 300 – 499
FICO Scoring
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FREE!!!
Get your
FREEcredit score!
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Free
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Learn more & stay connected!
www.MyGenFCU.org
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