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Analyzing a
Credit-Card Statement
Activity 3.3
Using credit cards wisely
• Video 3 introduces key ideas about credit cards
• Many people use credit cards wisely, as for
emergency situations
• But credit cards can fool you – and you may
end up in debt over your head
April 7, 2009 Activity 3.3 2
Credit cards vs. debit cards
• Read Part 1 of Student Activity 3.3 carefully.
• Questions for Discussion A through C refer to
this reading
April 7, 2009 Activity 3.3 3
Questions for discussion: A
• What is a debit card?
April 7, 2009 Activity 3.3 4
Questions for discussion: B
• What is a credit card?
April 7, 2009 Activity 3.3 5
Questions for discussion: C
• What are three tips for using a credit card
wisely?
April 7, 2009 Activity 3.3 6
The big list: using credit wisely
• Have only one card
• Close any credit-card accounts you don’t use
• Shred unused credit-card applications
• Pay off the monthly balance
• Shop for a card with a low interest rate and no
annual fee
• Use your card for travel and emergencies
• Use credit-card records to track your spending
• Avoid using your card for minor purchases
April 7, 2009 Activity 3.3 7
An important exhibit
• Read Part 2 of Student Activity 3.3 and study
the credit card statement (next two slides).
Then Part 2’s Questions for Discussion A
through G will appear on that statement.
April 7, 2009 Activity 3.3 8
RALPH’S PRETTY GOOD DEPARTMENT STORE
JOAN BERELLI
1616 ELM STREET AMOUNT DUE
MIDDLETON, MA 02568 THIS STATEMENT $ 18.00
YOUR LINE OF CREDIT IS $1000 NEW BALANCE $ 372.21
YOUR AVAILABLE CREDIT IS $ 638
Mo. Day Reference TRANSACTION DESCRIPTION CHARGES PAYMENTS
& CREDITS
**FINANCE CHARGE ON AVERAGE $5.64
DAILY BALANCE OF $363.52 IS
03 24 9545 PAYMENT 18.00
03 29 0032 WOMENS WEAR 29
SWEATER 43 38.76
ON AVERAGE MONTHLY ANNUAL
DAILY BALANCE OF: PERIODIC PERCENTAGE
RATE RATE
$.01 TO $33 MIN. FINANCE CHARGE $.50
FINANCE $33.01 TO $500.00 1.5% 18%
CHARGE
RATE(S) $500.01 AND ABOVE 1.25% 15%
RALPH’S PRETTY GOOD DEPARTMENT STORE (statement continued)
use ACCOUNT NO. BILLING PREVIOUS NEW MINIMUM
on correspondence DATE BALANCE BALANCE PAYMENT
K 7605 3821 F APR 12 2005 345.81 372.21 18.00
To avoid a FINANCE CHARGE next month, pay the NEW BALANCE shown above within 30 days (28 days for
February statements) from BILLING DATE. If you prefer to pay in installments pay the MINIMUM
PAYMENT shown above, or more, within 30 days (28 days for February statements) form BILLING DATE. The
sooner you pay and the more you pay, the smaller your FINANCE CHARGE.
RALPH’S PRETTY GOOD DEPARTMENT STORE
JOAN BERELLI A. What is the
1616 ELM STREET AMOUNT DUE
MIDDLETON, MA 02568
finance charge THIS STATEMENT $ 18.00
for the current
YOUR LINE OF CREDIT IS $1000 NEW BALANCE
billing period? $ 372.21
YOUR AVAILABLE CREDIT IS $ 638
Mo. Day Reference TRANSACTION DESCRIPTION CHARGES PAYMENTS
& CREDITS
**FINANCE CHARGE ON AVERAGE $5.64
DAILY BALANCE OF $363.52 IS
03 24 9545 PAYMENT 18.00
03 29 0032 WOMENS WEAR 29
SWEATER 43 38.76
ON AVERAGE MONTHLY ANNUAL
DAILY BALANCE OF: PERIODIC PERCENTAGE
RATE RATE
$.01 TO $33 MIN. FINANCE CHARGE $.50
FINANCE $33.01 TO $500.00 1.5% 18%
CHARGE
RATE(S) $500.01 AND ABOVE 1.25% 15%
RALPH’S PRETTY GOOD DEPARTMENT STORE
JOAN BERELLI
1616 ELM STREET
B. What is the AMOUNT DUE
MIDDLETON, MA 02568 annual percentage THIS STATEMENT $ 18.00
YOUR LINE OF CREDIT IS
rate if the unpaid NEW BALANCE
$1000 $ 372.21
balance is over
YOUR AVAILABLE CREDIT IS
$500? Less than
$ 638
Mo. $500?
Day Reference TRANSACTION DESCRIPTION CHARGES PAYMENTS
& CREDITS
**FINANCE CHARGE ON AVERAGE $5.64
DAILY BALANCE OF $363.52 IS
03 24 9545 PAYMENT 18.00
03 29 0032 WOMENS WEAR 29
SWEATER 43 38.76
ON AVERAGE MONTHLY ANNUAL
DAILY BALANCE OF: PERIODIC PERCENTAGE
RATE RATE
$.01 TO $33 MIN. FINANCE CHARGE $.50
FINANCE $33.01 TO $500.00 1.5% 18%
CHARGE
RATE(S) $500.01 AND ABOVE 1.25% 15%
RALPH’S PRETTY GOOD DEPARTMENT STORE
JOAN BERELLI C. What is the
1616 ELM STREET AMOUNT DUE
MIDDLETON, MA 02568
minimum THIS STATEMENT $ 18.00
payment due?
YOUR LINE OF CREDIT IS $1000 NEW BALANCE $ 372.21
YOUR AVAILABLE CREDIT IS $ 638
Mo. Day Reference TRANSACTION DESCRIPTION CHARGES PAYMENTS
& CREDITS
**FINANCE CHARGE ON AVERAGE $5.64
DAILY BALANCE OF $363.52 IS
03 24 9545 PAYMENT 18.00
03 29 0032 WOMENS WEAR 29
SWEATER 43 38.76
ON AVERAGE MONTHLY ANNUAL
DAILY BALANCE OF: PERIODIC PERCENTAGE
RATE RATE
$.01 TO $33 MIN. FINANCE CHARGE $.50
FINANCE $33.01 TO $500.00 1.5% 18%
CHARGE
RATE(S) $500.01 AND ABOVE 1.25% 15%
RALPH’S PRETTY GOOD D. What is the STORE
DEPARTMENT
JOAN BERELLI
total amount
1616 ELM STREET charged for AMOUNT DUE
MIDDLETON, MA 02568
purchases THIS STATEMENT $ 18.00
YOUR LINE OF CREDIT IS made during
$1000 NEW BALANCE $ 372.21
YOUR AVAILABLE CREDIT IS
the previous
$ 638
month?
Mo. Day Reference TRANSACTION DESCRIPTION CHARGES PAYMENTS
& CREDITS
**FINANCE CHARGE ON AVERAGE $5.64
DAILY BALANCE OF $363.52 IS
03 24 9545 PAYMENT 18.00
03 29 0032 WOMENS WEAR 29
SWEATER 43 38.76
ON AVERAGE MONTHLY ANNUAL
DAILY BALANCE OF: PERIODIC PERCENTAGE
RATE RATE
$.01 TO $33 MIN. FINANCE CHARGE $.50
FINANCE $33.01 TO $500.00 1.5% 18%
CHARGE
RATE(S) $500.01 AND ABOVE 1.25% 15%
RALPH’S PRETTY GOOD DEPARTMENT STORE
E. How much
JOAN BERELLI
credit does Joan
1616 ELM STREET AMOUNT DUE
Berelli
MIDDLETON, MA 02568 still have THIS STATEMENT $ 18.00
available?
YOUR LINE OF CREDIT IS $1000 NEW BALANCE $ 372.21
YOUR AVAILABLE CREDIT IS $ 638
Mo. Day Reference TRANSACTION DESCRIPTION CHARGES PAYMENTS
& CREDITS
**FINANCE CHARGE ON AVERAGE $5.64
DAILY BALANCE OF $363.52 IS
03 24 9545 PAYMENT 18.00
03 29 0032 WOMENS WEAR 29
SWEATER 43 38.76
ON AVERAGE MONTHLY ANNUAL
DAILY BALANCE OF: PERIODIC PERCENTAGE
RATE RATE
$.01 TO $33 MIN. FINANCE CHARGE $.50
FINANCE $33.01 TO $500.00 1.5% 18%
CHARGE
RATE(S) $500.01 AND ABOVE 1.25% 15%
RALPH’S PRETTY GOOD DEPARTMENT STORE
JOAN BERELLI F. What is the
1616 ELM STREET AMOUNT DUE
MIDDLETON, MA 02568
new balance? THIS STATEMENT $ 18.00
YOUR LINE OF CREDIT IS $1000 NEW BALANCE $ 372.21
YOUR AVAILABLE CREDIT IS $ 638
Mo. Day Reference TRANSACTION DESCRIPTION CHARGES PAYMENTS
& CREDITS
**FINANCE CHARGE ON AVERAGE $5.64
DAILY BALANCE OF $363.52 IS
03 24 9545 PAYMENT 18.00
03 29 0032 WOMENS WEAR 29
SWEATER 43 38.76
ON AVERAGE MONTHLY ANNUAL
DAILY BALANCE OF: PERIODIC PERCENTAGE
RATE RATE
$.01 TO $33 MIN. FINANCE CHARGE $.50
FINANCE $33.01 TO $500.00 1.5% 18%
CHARGE
RATE(S) $500.01 AND ABOVE 1.25% 15%
RALPH’S PRETTY GOOD DEPARTMENT STORE
JOAN BERELLI G. How is the
1616 ELM STREET AMOUNT DUE
MIDDLETON, MA 02568
new balance THIS STATEMENT $ 18.00
determined?
YOUR LINE OF CREDIT IS $1000 NEW BALANCE $ 372.21
YOUR AVAILABLE CREDIT IS $ 638
Mo. Day Reference TRANSACTION DESCRIPTION CHARGES PAYMENTS
& CREDITS
**FINANCE CHARGE ON AVERAGE $5.64
DAILY BALANCE OF $363.52 IS
03 24 9545 PAYMENT 18.00
03 29 0032 WOMENS WEAR 29
SWEATER 43 38.76
ON AVERAGE MONTHLY ANNUAL
DAILY BALANCE OF: PERIODIC PERCENTAGE
RATE RATE
$.01 TO $33 MIN. FINANCE CHARGE $.50
FINANCE $33.01 TO $500.00 1.5% 18%
CHARGE
RATE(S) $500.01 AND ABOVE 1.25% 15%
Conclusion: Knowing how to read a credit
card statement is a useful skill in
managing credit.
• You get the advantage of “buy now, pay later”
• To make good decisions, it’s important to know
how much credit costs you
April 7, 2009 Activity 3.3 18
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