Recognizing that students may have hazy notions about the consequences of overspending, this program provides practical information on credit card use, credit reports, credit problems, and managing debt. Viewers learn how to build a credit history and raise a low credit score—and why this is important.
Taking a look at a sample credit card statement, the video explains the various fees, charges, and rates, and cautions against relying on cash advances. Mortgages, home equity loans, and the more costly “alternative” loans are covered as well. The program closes with strategies for getting and staying out of debt. Highlights include applying for a car loan, a checklist of warning signs of financial irresponsibility, and ways to fix credit problems.
1. Introduction to Credit The use of credit can have a huge multiplier effect on the economy. Before a person starts using credit, it is important to get educated on the pros and cons of credit and debt.
2. Credit Cards: Pros & Cons Credit cards come with terms, rates, and loopholes. A signed credit card agreement is a legal contract. There are a variety credit card types. Secured and unsecured credit cards are explained.
3. Credit Cards and Statements Common credit card terms include finance charge, APR, transfer fee, default fee, cash advance fee, and late fees. Credit card statements include payment information, account summary, credit limit, and more.
4. Credit Reports and Scores Experian, Equifax, or TransUnion collect financial data from financial institutions. Data is compiled into reports and made available to other financial institutions. Credit scores (FICO) are derived from credit reports.
5. Common Consumer Loans: Car Loan Prior to seeking a loan, consumers must get their credit reports and credit score. Poor scores can be improved over time. Shop around for the most favorable loan. Online loan calculators are useful. Always put 20% down.
6. Common Consumer Loans: Mortgage and Other Loans mortgages are secured loans. Check credit report before loan shipping. Fixed and adjustable rate mortgages are illustrated. Other loans include home equity loans, payday loans, and student loans. Terms of any loan are clearly spelled out and must be understood by consumers.
7. Credit Problems Some of the warning signs of credit problems are 1) difficulty paying bills on time, 2) at or above credit limits, 3) credit has been denied, and more. A series of small steps that can alleviate credit problems are explained. Bankruptcy is a last resort.
8. Managing Debt Consumers must control and manage their debt. The first step is to prepare a budget and chart a course to become debt free. Prioritize debt and seek additional income. Get help to learn how to manage debt responsibly.
Personal Finance Essentials: Credit, Borrowing, and Debt (DVD)
Time: 34 Minutes