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LET’S PRACTICE
13. Look at Interest Charged Calculation . Do purchases, cash advances, and balance transfers have different APRs ? What are they? _ ______________________________________________________________________________ _ ______________________________________________________________________________ 14. In 2014 Americans used credit cards for over $___ trillion of purchases. 15. A credit card is a form of ___________ which must be repaid. a. debit card b. wealth c. a loan d. net worth 16. The credit card holder has a set period of time to repay their debt, called the grace period . The grace period is usually about ________ days after the billing cycle closing date. a. 5–10 b. 10–14 c. 17–20 d. 21–25 17. T F A charge card is different from a credit card because the borrower must pay off the full balance each month. 18. Credit card networks don’t lend money to anyone; they have the technology to make the card work. Notable credit card networks are: a. Macy’s c. Master Card b. Visa d. b & c 19. If you fail to make the minimum payment, or miss a payment and fail to bring the account current by the next billing cycle closing date, your account status is a. in default c. maxed out b. 30 days past due d. canceled 20. T F In lean financial times, it’s ok to make less than the minimum monthly payment as long as the payments are timely and consistent. 21. _Imagine that you bought a $450 tablet with a credit card that carried an interest rate of 18%. If you paid your bill within the grace period, what amount must you pay to avoid any interest charge on this purchase? a. $450 c. $461.75 b. $455 d. $531 22. Imagine that you bought a $450 tablet with a credit card that carried an interest rate of 18%. You make a the minimum payment on the card. The next month you use the card to purchase $300 in clothes; Again you make the minimum payment. If you make no more purchases and continue this pattern of making minimum payments, how long will it take to pay off the debt and how much will you pay in total? Go to www.bankrate. com/calculators/credit-cards/credit-card-minimum-payment.aspx _ ______________________________________________________________________________ PRODUCT PREVIEW
THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY 255
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