Prentice-Hall, Inc. 1
Using Credit Cards:
The Role of Open Credit
Prentice-Hall, Inc. 2
Definitions and Examples of
Credit
Credit -- receiving cash, goods, or services
with an obligation to pay later.
– Examples -- auto loans or personal loans
Open credit -- credit that you can use and
repay at your pace so long as you pay the
required minimum monthly payment.
– Examples -- Credit cards or department store
credit cards
Prentice-Hall, Inc. 3
6 - 3
Why People Use Credit
For Convenience
For Emergencies
For Identification
To Make Reservations
To Consume Expensive Products Sooner
To Enjoy the Good Life
To Take Advantage of Free Credit
To Consolidate Debts
To Obtain an Education
Prentice-Hall, Inc. 4
Credit Card Statements
Billing Date- (Sometimes called the Closing Date or Statement Date) is the last date of the month for which any transactions are reported; this is generally the same date each month
Due Date- Date, specified by credit card company, of when they should receive payment
– The period between the billing date and due date is usually about 20-25 days
– Watch the fine print! (Example: time of payment)
Prentice-Hall, Inc. 5
Determining the Costs of
Open Credit
The balance owed
Interest rates
Balance calculation method
Cash advance costs
The grace period
The annual fee
Additional or penalty fees
Prentice-Hall, Inc. 6
Interest Rates
Annual percentage rate (APR) – the
cost of credit on a yearly basis as a
percentage rate
Teaser rates – introductory rates used
to attract new customers, some as low
as 2.9%
Most credit cards compound interest
Prentice-Hall, Inc. 7
Balance Calculation Methods
Average daily balance,
most common
– Including new purchases
– Excluding new
purchases
– Two-cycle
Previous balance –
most expensive
Adjusted balance –
least expensive
Prentice-Hall, Inc. 8
Buying Money: The Cash
Advance
An extremely expensive way to borrow
Interest begins immediately and may be at a higher rate than for purchases
Usually there is a “cash advance fee” of 2% to 4% of the amount advanced
Some cards require payment of the purchase balance before payment of the cash advance balance
Prentice-Hall, Inc. 9
The Grace Period
Normally 20 to 25 days, excluding cash
advances
Doesn’t apply if you carry a balance
With no balance, you could avoid
paying for a purchase for nearly 2
months
Not all credit cards offer a grace period
Prentice-Hall, Inc. 10
The Annual Fee
Range from $0 to $100 (American Express charges $300 for their Platinum card.)
70%of the 25 biggest card issuers don’t charge an annual fee.
Merchant’s discount fee -- charged to merchants, typically 1.5% to 5.0% of the purchase amount
Prentice-Hall, Inc. 11
Additional Fees
Cash advance fee
Late fee
Over-the-limit fee
Penalty rates
Be alert--
“Important Notice of
Change of Terms”
Prentice-Hall, Inc. 12
Keterangan Citibank Gold Card Citibank Silver Card
Suku Bunga
a. Suku Bunga Pembelanjaan 3.5% per bulan / 42% per tahun
b. Suku Bunga Pengambilan Tunai 4% per bulan / 48% per tahun
Biaya Pengambilan TunaiDikenakan atas setiap transaksi Penarikan Tunai dengan
menggunakan Kartu Kredit Citibank
4% dari jumlah yang diambil atauminimum Rp. 50.000
4% dari jumlah yang diambil atauminimum Rp. 40.000
Biaya Keterlambatan Pembayaran Dikenakan bila pembayaran Anda diterima setelah lewat Tanggal
Jatuh Tempo, atau bila jumlah pembayaran kurang dari Pembayaran Minimum
6% dari jumlah Pembayaran Minimum yang tertunggak sampai
dengan 1 bulan sejak tanggal penagihan sebelumnya.
Minimum Rp. 75.000 dan maksimum Rp. 150.000
6% dari jumlah Pembayaran Minimum yang tertunggak sampai
dengan 1 bulan sejak tanggal penagihan sebelumnya.
Minimum Rp. 50.000 dan maksimum Rp. 100.000
Biaya Pemakaian di Luar Batas (Over Limit) Dikenakan bila penggunaan Kartu Kredit Citibank Anda melebihi
Batas KreditRp. 75.000 Rp. 50.000
Biaya Penggantian Kartu Dikenakan atas setiap penerbitan Kartu Kredit Citibank baru sebagai pengganti Kartu Kredit Citibank sebelumnya yang hilang atau rusak
dan telah dilaporkan kepada Citibank sesuai prosedur pelaporan kehilangan atau kerusakan Kartu Kredit Citibank
Rp. 50.000 per kartu
Biaya Pengembalian Cek/Giro Dikenakan bila Anda membayar tagihan Kartu Kredit Citibank dengan cek/giro yang harus diproses melalui kliring dan ternyata kemudian
cek/giro tersebut dikembalikan oleh Bank tertarik dengan alasan apapun
Rp. 25.000
Bea Materai Atas Lembar PenagihanBesarnya akan tergantung pada nilai pembayaran yang Anda lakukan
Sampai dengan Rp 250.000 Rp. 0
Di atas Rp 250.000 sampai dengan Rp 1 juta Rp. 3.000
Di atas Rp 1 juta Rp. 6.000
Biaya Sales Draft Dikenakan untuk setiap pemberian salinan atau fotokopi dari sales
draft sebagai bukti penggunaan Kartu Kredit Citibank atas permintaan Anda
Rp. 25.000
Biaya Cetak Ulang Lembar Penagihan Dikenakan untuk setiap permintaan pencetakan ulang Lembar
Penagihan yang sebelumnya telah dikirimkan oleh Citibank kepada Anda
Rp. 30.000
Contoh Kartu Citibank
Prentice-Hall, Inc. 13
The Pros of Credit Cards
Convenience or ease of shopping
Emergency use
Consume and use before the purchase
is fully paid for
Bill consolidation
Can be used in anticipation of price
increases
Prentice-Hall, Inc. 14
The Pros of Credit Cards (cont’d)
Interest-free credit
Make reservations
Use as identification
A source of free
benefits
Prentice-Hall, Inc. 15
The Cons of Credit Cards
It’s too easy to lose control of spending.
It’s, in general, an expensive way to
borrow money.
It’s an obligation of future income--you’ll
have less to spend in the future.
Prentice-Hall, Inc. 16
Choosing a Source of Open
Credit
Bank credit cards– Bank card variations
Travel and entertainment (T&E) cards
Single-purpose cards
Prentice-Hall, Inc. 17
Bank Credit Cards
Issued by banks, may charge annual
fees
Visa and MasterCard franchise credit
authorization systems
Offer a variety of benefits
May be “co-branded” or “rebate cards”
Prentice-Hall, Inc. 18
Bank Card Variations
Premium or prestige
cards
Affinity cards
Secured credit
cards
Prentice-Hall, Inc. 19
Other Sources of Open Credit
Travel and entertainment cards require full payment monthly.
Single-purpose cards may or may not offer revolving credit, but usually have no annual fee.
Traditional charge accounts offer convenience of payment and service before billing.
Prentice-Hall, Inc. 20
Know Your Credit Card
Philosophy
Credit user
– Low APR
Convenience user
– Low annual fee
– Long, interest-free grace period
– Free benefits
Convenience and credit user
– Balance interest rate and annual fee for the lowest
total cost
Prentice-Hall, Inc. 21
Getting a Credit Card: The
Five Cs of Credit
Character
Capacity
Capital
Collateral
Conditions
Prentice-Hall, Inc. 22
Character adalah data tentang kepribadian dari calon
pelanggan seperti sifat-sifat pribadi, kebiasaan-
kebiasaannya, cara hidup, keadaan dan latar belakang
keluarga maupun hobinya. willingness to pay.
Capacity merupakan kemampuan calon nasabah dalam
mengelola usahanya yang dapat dilihat dari pendidikannya,
pengalaman mengelola usaha (business record) nya,
sejarah perusahaan yang pernah dikelola (pernah
mengalami masa sulit apa tidak, bagaimana mengatasi
kesulitan) ability to pay
Capital adalah kondisi kekayaan yang dimiliki oleh
perusahaan yang dikelolanya. Hal ini bisa dilihat dari
neraca, laporan rugi-laba, struktur permodalan, ratio-ratio
keuntungan yang diperoleh
Prentice-Hall, Inc. 23
Collateral adalah jaminan yang mungkin bisa disita
apabila ternyata calon pelanggan benar-benar tidak
bisa memenuhi kewajibannya.
Condition, pembiayaan yang diberikan juga perlu
mempertimbangkan kondisi ekonomi yang dikaitkan
dengan prospek usaha calon nasabah. Ada suatu
usaha yang sangat tergantung dari kondisi
perekonomian, oleh karena itu perlu mengaitkan
kondisi ekonomi dengan usaha calon pelanggan.
Prentice-Hall, Inc. 24
Credit Evaluation: The Credit
Bureau
The credit bureau: collects and reports
information from creditors, public court
records, and the consumer.
Determining your creditworthiness --
credit scoring determines if you qualify
for credit and the interest rate offered.
Prentice-Hall, Inc. 25
Information on Your Credit
Report
Personal demographics
– age
– Social Security number
– addresses
Employment history
Credit history
Prentice-Hall, Inc. 26
Information on Your Credit
Report (cont’d)
Criminal convictions
and judgments
Previous two years
of inquiries
Prentice-Hall, Inc. 27
Factors That Determine
Creditworthiness
Annual income
Length of time at current residence
Length of time at current job
Type of residence
Age
Employment
Prentice-Hall, Inc. 28
Factors That Determine
Creditworthiness (cont’d)
Number of bank accounts
Number of credit cards
If you have a telephone
Credit history
Note: All the factors provide
information historically linked with
individuals that are good credit risks.
Prentice-Hall, Inc. 29
If Your Application Is Rejected
Apply for a card with
another institution
Find out WHY you
were rejected. Then,
take steps to correct
the problem.
Prentice-Hall, Inc. 30
Managing Your Credit Cards
and Open Credit
Reducing your balance
Protecting against fraud
Trouble signs in credit card spending
Controlling spending
If you can’t pay your credit card bills
Prentice-Hall, Inc. 31
Reducing Your Balance
Pay more than the
2% to 3% minimum
monthly payment
Find a card that
offers a lower
interest rate
Prentice-Hall, Inc. 32
Protecting Against Fraud
Save your credit card receipts.
Compare them to your statement.
Destroy old receipts.
Use caution when giving out your credit
card number.
Never leave a store without your card.
Prentice-Hall, Inc. 33
What to Do If You Can’t Pay
Your Credit Card Bills
“Act your wage!!”
Make sure you have the least
expensive credit card.
Consider using savings, if possible, to
pay off debts.
Consolidate your debts with a home
equity loan or secured personal loan.
Prentice-Hall, Inc. 34
Summary
Two types of open credit
– revolving credit lines and credit cards, including
bank, T&E, and single purpose cards
Factors that determine the cost of credit
– interest rate
– balance calculation method
– grace period
– annual fees
– other fees
Prentice-Hall, Inc. 35
Summary (cont’d)
Advantages of using
open credit
– source of interest-
free credit
– making reservations
– use as identification
– source of free
benefits
Disadvantages of
using open credit
– easy to lose control
of spending
– an expensive way to
borrow money
– you’ll have less
spendable income in
the future
Prentice-Hall, Inc. 36
Summary (cont’d)
The “five C’s” of creditworthiness
– character, capacity, capital, collateral, and conditions
National credit reporting bureaus
– Experian, Equifax, and Trans Union
Methods of calculating finance charges
– average daily balance, previous balance, and adjusted balance
Prentice-Hall, Inc. 37
Summary (cont’d)
Monitor credit report information
Control credit spending
Recognize and avoid credit trouble
Understand credit consumer protection
laws
Prentice-Hall, Inc. 38
VIDEO