Credit CardsCredit Cards

What Is Credit?What Is Credit?

CreditCredit is a method of is a method of selling goods or services selling goods or services without the buyer having without the buyer having cash in handcash in hand

Credit Card HistoryCredit Card History

Credit cards Credit cards began in 1951 began in 1951 with Diner’s with Diner’s ClubClub

Intended to pay Intended to pay restaurant bills restaurant bills onlyonly

First-Time CardsFirst-Time Cards

Average Average balance balance owed on owed on credit credit cards: $885cards: $885

Debt Is a Good Thing?Debt Is a Good Thing?

The average The average American American household’s household’s credit card credit card debt in 2007 debt in 2007 is is $9,840$9,840. .

Credit Cards TodayCredit Cards Today

In 1968, In 1968, consumers’ consumers’ total credit total credit debt was debt was $8 $8 billionbillion (in (in current current dollars). dollars).

Now the total Now the total exceeds exceeds $880 $880 billionbillion..

What Do We Buy?What Do We Buy?

U.S. consumers U.S. consumers racked up an racked up an estimated estimated $51 $51 billionbillion worth of worth of fast foodfast food on their on their personal credit and personal credit and debit cards in debit cards in 2006, compared to 2006, compared to $33.2 billion one-$33.2 billion one-year ago. year ago.

Who Has Them?Who Has Them?

The The average average American American has has fourfour credit credit cards; up cards; up from 3.2 from 3.2 cards in cards in 2004 2004

Targeting YOU!Targeting YOU!

More than More than 40%40% of 18 of 18 – 21 year-– 21 year-oldsolds now now own a own a credit cardcredit card

Who Gets Offers?Who Gets Offers?

Credit card Credit card companies mailed a companies mailed a record $6 Billion in record $6 Billion in offers in 2005 alone. offers in 2005 alone.

That comes to That comes to around 20 per every around 20 per every one of 300 million one of 300 million Americans in the Americans in the US. US.

Late Payments?Late Payments?

Credit card Credit card companies companies made made $43 $43 BillionBillion in late in late payments, late payments, late fees, and fees, and balance balance transfer fees in transfer fees in 2004 2004

““Revolvers”Revolvers” 60%60% of U.S. of U.S.

consumers always (or consumers always (or usually) pay off their usually) pay off their bills bills in fullin full each month. each month.

The The 40%40% who don’t who don’t pay off their bills each pay off their bills each month are called month are called “revolvers”. In 2007, “revolvers”. In 2007, revolvers paid revolvers paid $18.1 $18.1 billionbillion in penalty fees in penalty fees to credit card to credit card companies. companies.