Consumer Credit Counseling Service of Southern Oregon Inc

Consumer Credit Counseling Service of Southern Oregon, Inc www. cccsso. org Ashland High School November 18

What Is Interest? n Interest is what you pay for the privilege of using someone else’s money. n Interest is also paid to you by a financial institution to use your funds.

But I’m still in High School! n Right now you have a clean slate n The best time to prevent debt is now n Knowing how credit cards, car loans, mortgages, and savings work will help you make better decisions in the future

Wal-mart Television: A n Wal-mart has a color television on sale for $300. 00 n The salesperson says you can take home the television now. n You have to make a payment of $25. 00 per month n You have to pay 24% interest to Wal-mart to take home your TV now.

Wal-Mart Television A Pay $ 25. 00 Interest $ 6. 00 Principal $ 19. 00 Balance $ 281. 00 3 rd month 4 th month $ 25. 00 $ 5. 62 $ 5. 23 $ 19. 38 $ 19. 77 $ 261. 62 $ 241. 85 …………… 13 th month …………… $ 25. 00 $ 4. 84 …………… $ 20. 16 …………… $ 221. 69 …………… $ 24. 10 $ 21. 07 Totals $ 346. 07 $. 90 $ 46. 07 1 st month 2 nd month

Wal-mart Television: B n Wal-mart has a color television on sale for $300. 00 n You want to save $25. 00 per month towards buying a $300. 00 TV. n Your bank will pay you 2% interest on your savings account

Wal-Mart Television B Beginning You Pay Old Balance The Bank’s New Balance 1 st month $ 0. 00 $ 25. 00 $ 0. 50 $ 25. 50 2 nd month $ 25. 50 $ 25. 00 $ 50. 50 $ 1. 01 $ 51. 51 3 rd month $ 51. 51 $ 25. 00 $ 76. 51 $ 1. 53 $ 78. 04 4 th month $ 78. 04 $ 25. 00 $ 103. 04 $ 2. 06 $ 105. 10 …………… ………… $ 279. 22 $ 25. 00 $ 304. 22 $ 6. 08 $ 310. 30 11 th month

Best Buy’s Credit Card Offer • Apple® - i. Pod touch® 64 GB* MP 3 Player (4 th Generation - Latest Model) – Black • $399. 99 • 18 Months. . No interest Plan No Interest storewide on all purchases if paid in full within 18 months Interest will be charged to your account from the purchase date if the purchase balance is not paid in full within 18 months or if you make a late payment. Minimum total purchase of $249 required. Required minimum payments is greater of $10 or 1% of balance, plus billed interest charges, plus any late fees, or it can also be 2. 5% of balance if card issued by Chase. Online and in-store offers may vary. HSBC Financing Info: On approved purchases on the Best Buy consumer credit card by HSBC Bank Nevada, N. A. Min. interest charge = $2. Certain rules apply to the allocation of payments and interest charges on your promotional purchase if you make more than one purchase on your credit card. Call 1 -888 -367 -4310 or review your cardholder agreement for further information. HSBC Deferred Interest Info Variable APRs as of 10/01/2010: Plan A: For Accounts generated on or after 06/29/10: Variable Standard Rate APR: 25. 24%. Variable Penalty Rate APR: 29. 99%. For Accounts generated before 06/29/10: Variable Standard Rate is 24. 24%. Variable Penalty Rate is 29. 24%. Plan B: Variable Standard APR: 27. 99%. Variable Penalty APR: 29. 99%.

Best Buy i. Touch…. n No Interest storewide on all purchases if paid in full within 18 months n Interest will be charged to your account from the purchase date if the purchase balance is not paid in full within 18 months or if you make a late payment. n Variable Penalty Rate APR: 29. 99%.

Best Buy i. Touch The way you hope it works Balance 1 st 2 nd 3 rd ……… 17 th 18 th Payment $ 399. 99 $ 377. 99 $ 355. 99 …………… $ 47. 99 $ 25. 99 $ 22. 00 ……………… $ 22. 00 $ 25. 99 New Balance $ 377. 99 $ 355. 99 $ 333. 99 ……………… $ 25. 99 $ 0. 00

Best Buy i. Touch The way it most likely will happen Balance 1 st 2 nd 3 rd ………… 18 th 24 th 25 th Totals $ 399. 99 $ 387. 99 $ 375. 69 ………… $ 149. 61 $ 32. 97 $ 11. 79 Payment 2. 5% Int. New Balance $ 22. 00 $ 10. 00 $ 387. 99 $ 22. 00 $ 9. 70 $ 375. 69 $ 22. 00 $ 9. 39 $ 363. 08 ………………… $ 22. 00 $ 3. 74 $ 131. 35 $ 22. 00 $ 0. 82 $ 11. 79 $ 0. 00 $ 539. 79 $ 139. 80

40” Flat Screen TV n n The flat screen costs $1800 Sears is letting you take home the TV They are charging you 18% interest You have to pay a minimum of 2. 5% of the balance per month, with a minimum payment of $10. 00 Month 1 st 2 nd 3 rd Min Pay $ 45. 00 $ 44. 55 $ 44. 10 Int. Paid $ 27. 00 $ 26. 73 $ 26. 46 Prin. Paid $ 18. 00 $ 17. 82 $ 17. 64 Balance $ 1, 782 $1764. 18 $1746. 54

40” Flat Screen Continued Month Min Pay Int. Paid Prin. Paid Balance 209 th $ 10. 00 $ 0. 46 $ 9. 54 $ 21. 43 210 th $ 10. 00 $ 0. 32 $ 9. 68 $ 11. 75 211 th $ 10. 00 $ 0. 18 $ 9. 82 $ 1. 93 212 th $ 1. 93 $ 0. 00 $ 1. 96 $ 0. 00 • 212 Months is equal to 17 years 9 months • Your 40” television cost $1800 • The interest you paid to Sears is: $2, 315. 32 • The total coast of your television was: $4, 115. 32

Your Credit Card Statement Balance Due Minimum Payment Interest Rate Time to Pay Off Total Cost of Purchase $1800 $45. 00 18% 18 Year $4100

What is a credit score? n. A number that tells people lending you money how safe it is to do that n A number used to determine whether to rent you an apartment n Employers are looking at people’s credit scores to see how they manage their own money.

How do you get a good Credit Score? • Pay your bills on time • When you borrow money, pay it back promptly • Don’t borrow more money than you can comfortably pay back How do you get a bad score? • Miss payments entirely • Make payments that are less than agreed • Make payments later than agreed • Spend more than the banks let you

Auto Class 101 n Buying a $12, 000 SUV n You have saved $ 2, 000 towards to down payment n You have to finance $10, 000 to buy the car

Auto Class 101 The Terms: 5 Year Loan Amt Financed Interest Rate Monthly Pay Total Interest $10, 000 6. 5% 12. 00% $10, 000 18. 00% 24. 00% $ 168. 10 $ 2, 103. 15 $ 195. 50 $ 4, 076. 14 $ 228. 08 $ 6, 421. 61 $ 263. 27 $ 8, 955. 32 Total Payments $ 12, 103 $ 14, 076 $ 16, 422 $ 18, 955

A Higher FICO Score Saves You Money 30 Year Mortgage Loan Amount $200, 000 FICO Score APR* 760 -850 700 -759 640 -659 620 -639 4. 47% 4. 69% 5. 52% 6. 08% Monthly Payment $ 1, 010 $ 1, 034 $ 1, 139 $ 1, 209 Total Int. Paid Money Saved $163, 600 ****** $ 9, 720 $ 46, 400 $ 71, 640 $173, 320 $210, 040 $235, 240

n Please fill out the evaluation n We appreciate the input n Thanks…. . And Go Grizz 541 -779 -2273 www. cccsso. org