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This presentation is to help college students understand credit and learn the advantages and disadvantages of it.
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CreditBe a
financialgenius.
Advantages of credit
Get it now
No cash… No problem.
Keeps records
Easy
Consolidates
Disadvantages of credit
Interest & fees
Financial difficulties
Impulse buying
The Four “C’s” of Credit
1. Character
2. Capital
3. Collateral
4. Capacity
Types and sources of credit
❶Single Payment
❸Revolving
❷Installment
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
Building Credit
❶ Steady work
❷ Pay your existing bills
❺ Credit card or small loan
❹ Clean checking account
❸ Grow Savings
20 - 10
Rule of:
Rule: Never borrow more than 20% of Net Income.
Example:
$4,800 X 20% = $960
Rule: Monthly payments shouldn’t exceed 10% of
monthly Net Income.
Example:
$4,800 X 10% = $480
House payment should not
be counted.
Exception:
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
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
FREE!!!
Get your
FREEcredit score!
Free
Learn more & stay connected!
www.MyGenFCU.org
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