Credit Card Contract
 
 

Contract Between____________and ____________ for the Privilege of Getting a Credit Card backed by Parents.

Purpose

The purpose of this contract is for each of us to write down just what we expect from each other, and just what is allowed in the coming year.

Responsibility of Parent:

  1. 1.Provide advice and support how to manage a credit card

  2. 2.Will assist each month in showing _____________ how to pay it off in full

  3. 3.Will assist each month in tabulating total amount owed

  4. 4.Will assist in reporting any lost or stolen card

  5. 5.Will assist in any necessary loans to tide over in case credit card cannot be paid in full.

Responsibility of Young Adult:

  1. 1.Agrees to keep track of all expenditures by saving receipts and keeping them on file with summary in budget folder/book/computer file.

  2. 2.Agrees to not spend more than ___________ per month on items purchased without discussion with parent.

  3. 3.Agrees to read the credit agreement and be able to identify the following key features.    
    1. a.   How much the interest rate is each month when paid in full, and when only minimum payments are made.

    2. b.   How long it takes to pay off the card when only minimum payments are made and no further purchases are added.

    3. c.   Penalty sum for late payment

    4. d.   Research effects on credit score when payment is missed

    5. e.   Identify time period in which payment much be received

    6. f.    Method by which payment can be made

    7. g.   Identify the paragraph of statement in which lost cards, and the method of reporting, are listed and what the consequences of reporting promptly versus not reporting are

    8. h.  Identify how to contact card company to hold an account frozen, and how to unfreeze an account

    9. i.  Identify the latest date by which a payment can be posted to ensure it is credited to the account    


  4. 4.Agrees to regularly scheduled session with parent to review credit card bill and payment plan

  5. 5.Agrees to pay bill in full each month

  6. 6.Agrees that use of credit card will terminate immediately if entire bill cannot be paid in any single month

  7. 7.Agrees that Mom and Dad may make a loan to assist in payment of bill, for which full payment will be necessary prior to the utilization of the credit card resuming.

  8. 8.Agrees that Mom and Dad may charge interest to __________ for the loan equivalent to 50% of the credit card rate of interest.

  9. 9.Agrees to personally calculate the rate of interest on any loan from Mom and Dad and present the calculation to Mom and Dad representing the given calculation, including the savings maintained by making a loan from Parents instead of from Credit Card company.  

Miscellaneous Agreements:

  1. 1.Will report loss or theft of card to Parent 24/7 as soon as known.

  2. 2.Any accidental loss may be replaced ("insured") by parent

  3. 3.Both parties agree that any item in this contract may be unable to be kept and that the contract may be reopened for amendment if that should occur - but that any one item not being met shall not mean that the rest of the items in the contract will not still be followed.

 


   Signed by Young Adult_____________________________Date__________


   Signed by Parent______________________________________________

 

Learning to Manage a Credit Card is Critical:  Practice is the only way to become expert.  An agreement ahead of time is a good first step to learn the details and importance of good credit management.

Download PDF of Credit Care Contract HereCredit_Card_Contract_files/Credit%20Card%20Contract.pdfCredit_Card_Contract_files/Credit%20Card%20Contract.pdfCredit_Card_Contract_files/Credit%20Card%20Contract.pdfCredit_Card_Contract_files/Credit%20Card%20Contract.pdfCredit_Card_Contract_files/Credit%20Card%20Contract.pdfCredit_Card_Contract_files/Credit%20Card%20Contract.pdfshapeimage_5_link_0shapeimage_5_link_1shapeimage_5_link_2shapeimage_5_link_3shapeimage_5_link_4shapeimage_5_link_5