# Credit

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```					                                  Credit
1. What is credit?

2. Why is it important to have good credit history?

3. What is a negative effect of having bad credit?

4. What is the difference between interest when saving money and interest
when borrowing money?

5. What charges may you encounter by having a credit card?

6. You charge \$298.95 on a credit card. The card has an annual percentage
rate (APR) of 18%. Use the credit calculator to determine (1) how long it will
take to repay your debt if you make monthly payments of \$6>75 and (2) the
total amount of interest you will pay.

1.

2.
7. What do you need to think about before you make a purchase on credit?

8. Angie is buying a CD player for \$199 plus 6.5% tax. She decides to pay for it
in 2 equal installments on her credit card over 2 months. If the interest on
the credit card is 18% APR how much interest will Angie Pay?

9. What is the real cost of the CD player? Remember, it costs \$211.94 and the
total interest charge will be \$5.00.

10. Uh-oh, Angie neglected to make her payment on time. As a result, the bank
charged her a \$20 late fee. Therefore, the total amount Angie ended up
paying the bank was \$238. Had she paid cash, the CD player would have cost
her \$211.94. How much did using a credit card cost her?

11. Why would a loan be better to use on a big ticket item rather than a credit
card?

12. What do you now know about the benefits and drawbacks of having a credit
card?

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 views: 6 posted: 4/21/2012 language: pages: 3