Vocab.
The yearly interest rate charged on a credit card.
Annual Percentage Rate (APR)
Clara's March credit card statement had a previous balance of $185.86, new purchases of $216.39, a membership fee of $25, a finance charge of $4.76, and a payment of $200. What was her new balance?
$232.01
Stacy borrowed $350 for 60 days from his credit card company using a cash advance. The company charged a daily finance charge of 0.052%. What was Stacy's finance charge for the loan?
$10.92
Lance’s credit card statement for July showed these items: 7/1, previous balance, $54.69; 7/4, purchase, $29.94; 7/9, purchase, $145.32; 7/15, purchase $79.19; and 7/29, payment, $200. Lance’s card company uses a 3.4% monthly periodic rate and the average daily balance method including new purchases. What is Lance’s financial charge for July and his new balance?
$7.26 Finance charge
$116.40 New Balance
Pete earns $2,000 each month. He pays $600 per month for housing, $300 per month for car loan, and $400 per month on his credit card. Find Pete’s debt-to-income ratio and evaluate his financial health.
65%, dangerous financial position
A number between 300 and 850 generated by credit bureaus regarding your credit accounts.
Credit Score
Tim checked his credit card statement and found that a sales slip dated 5/3 for $121.56 was posted as $125.16. He also found that a purchase for $75.92 dated 5/19 was unauthorized. The new balance on his statement was $541.33. What is the correct new balance?
$461.81
Tony uses a credit card company that charges a yearly membership fee of $25, $28 for a late fee, and a daily finance charge of 0.055% on all cash advances. Last month, Tony was charged for his annual membership fee, a late fee, and a $300 cash advance that he borrowed for 30 days. What was the total amount that the credit card company charged Tony?
$357.95
In March, Michael’s credit card statement had a beginning balance of $593.45. He made a payment of $300 on the 26th of the month. If the credit card company uses an average daily balance method excluding new purchases with a monthly periodic rate of 2.5%, what are the finance charges?
$13.38
Sallie earns $2,500 each month. She pays $800 per month for housing, and $100 per month in other debt payments. What is her debt-to-income ratio? Evaluate her financial health.
36%, healthy debt load
The sum of the periodic finance charges and any fee charged.
Total Finance Charges
Jill's credit card statement included a sales slip for $52.96 that was unauthorized. She also found that a sales slip for $31.62 had been listed as $33.62. The new balance shown on her statement was $210.45. What is her correct new balance?
$155.49
Laura West’s credit card company uses an APR of 17% figured on the previous balance. The previous balance on Laura’s credit card statement for November was $308.88. The statement also showed new purchases and fees of $327.74, and payments and credits of $350 in November. a. What is Laura’s finance charge for November? b. Find her new balance.
a) $4.38
b) $291
Wendy borrowed $400 for 10 days on her credit card using a cash advance. Her card company charged fee of 5% of the cash advance and a daily periodic interest rate of 0.0625%. What was the total finance charge on the cash advance?
$22.50
Carl earns $1,050 each month. He pays $350 per month for housing, and has $75 per month in other debt payments. What is his debt-to-income ratio? Evaluate his financial health.
40%, begin reducing debts
A document or disclosure box that, by law, a credit card company must supply to all customers that outlines the costs associated with using the credit card.
Credit Terms and Conditions
Tammy started a MasterTerm credit card in January. She paid a membership fee of $35 and a balance transfer fee of $27 when she moved the balance of her old card to her new card. During the year, she paid these finance charges: Feb., $1.86; Mar., $5.32; July, $8.42; Nov., $5.28. What was Tammy’s total annual cost of the card?
$82.88
Alicia used a $250 cash advance from her credit card company to get cash while on a trip. The company charges a daily finance fee of 0.047%. She repaid the advance plus the finance fee 40 days later. What amount did Alicia repay the company?
$254.70
Rick borrowed $175 as a cash advance from his credit card company. The card company charged a cash advance fee of 4.5% and a daily periodic interest rate of 0.0675% for the 45 days he had the cash advance. What total amount did Rick need to pay off the cash advance and finance charge?
$188.20
The method that calculates the balance subject to finance charges by subtracting payments and credits from the previous balance.
Adjusted Balance Method
The credit card statements for Dan for the year showed: membership fee, $35; three late fees of $23; and an average finance charge of $2.75 a month. Find the total annual cost of the card to Dan.
$137
A credit card company issues a statement listing the following: previous balance, $461.88; purchases, $296.89; fees, $65; payments, $400; credits, $25. The credit card company uses an APR of 12% and the adjusted balance method of computing finance charges. a. What is the finance charge for the month?
b. Find the new balance
a) $0.37
b) $399.14
Jody’s credit card company has an APR of 16% for purchases and 18% for cash advances, each subject to the daily periodic rate. There is a cash advance fee of 5%. In a 31 day billing cycle, Jody’s purchase balance subject to finance charges is $314.98. She also took an advance of $150 during the billing cycle and must pay finance charges for 12 days. What are her total finance charges?
$12.67