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The Skinny on Credit Cards
How to Master the Credit Card Game
Credit cards, a big topic about such a small item (3.37 inches by 2.12 inches).
The first thing to know about credit cards is that nobody stood up and asked the banks to invent them. In fact, when credit cards first appeared on a grand scale (1958), it was because the Bank of America put thousands of cards in the hands of one California city.
"America began to change on a mid-September day in 1958 when the Bank of America dropped its first 60,000 credit cards on the unassuming city of Fresno, California.... A mass mailing of cards: 'a drop'.... There had been no outward yearning among the residents of Fresno for such a device, nor even the dimmest awareness that such a thing was in the works. It simply arrived one day, with no advance warning, as if it had dropped from the sky."
-Joe Nocera, A Piece of the Action (Simon & Schuster, 1994)
In the past 50 years, the credit card has, of course, become an integral part of our society. Today there are about 700 million active credit cards - two for every man, woman and child in the United States. Total credit card debt is about $1 trillion, and it is estimated that U.S. households who use credit cards have an average debt of about $10,000.
Skinny TV - Be Wary of Pesky Minimum Payments
What You'll Learn - Credit Card Vocabulary
Allocation: How your payments are attributed to your balance.
Annual Percentage Rate (APR): The interest you are paying on your balance. Note: you can have different APRs. For example, if you have a low-interest introductory card and use that card to obtain cash from your credit card company, the APR on the cash advance will not be the same as the introductory APR.
Balance: That portion of your credit card bill you do not pay off monthly.
Balance Transfer Card: A card onto which you can transfer debt from another card or cards.
Compound Interest: The earning of interest on interest.
Cash Advance: Money you can receive from your credit card company to use as you see fit.
Credit Limit of Line: The total amount you can charge against you card.
Daily Interest Rate: The APR divided by 365 days.
Deadbeat: Someone who pays off their balance in full every month.
FICO: A credit score derived from the Fair Isaac Corporation algorithm.
Float: When your usage of the credit card company's money is without charge.
Grace Period: The time you have between receiving and paying your bill.
Interest: The amount of money you are paying your credit card company on the money they loan you.
Late Fee: Big, ugly expense for paying your bill late - even by one day.
Minimum payment: The payment you are required to make every month if you carry a balance on your credit card.
Prime Rate: A published rate that is theoretically the interest rate banks charge their best customers; it can change daily.
Over-The-Limit Fee: A fee you pay when your total charges exceed your Credit Limit.
Rebate or Reward Card: Based on your usage, you get cash back or points to use for other purchases.
Revolver: A credit cardholder who carries a balance month after month.
Usuary: Lending at interest above a legal ceiling.
Bonus Resource: Download the full-length article entitled "The 15 Most Important Lessons To Avoid Credit Card Debt." Read Report Real Reviews "The Skinny on Credit Cards discusses a complex financial matter...in a way that even someone with no credit history can easily understand. This is no small achievement."
- Curtis Arnold, Founder, U.S. Citizens for Fair Credit Card Terms, Inc., Author
"I love this book, what a terrific job. This book can literally save you a fortune!"
- Gerri Detweiler, Ultimate Credit Solutions Inc.
"Written in an easy to understand style, and with a good dose of humor, The Skinny on Credit Cards gives the reader everything he/she needs to know to use credit cards more responsibly. A must read for teens and adults alike."
- Professor James Roberts, Baylor University
"Teaching abstinence from credit cards probably doesn't work. But if you're going to have credit cards, know what you're doing: The Skinny on Credit Cards," by Jim Randel, is a straight, simple, non-scary guide."
- Virginia Heffernan, New York Times Magazine
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