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4-4 CREDIT CARDS

4-4 CREDIT CARDS. OBJECTIVES. Become familiar with the basic vocabulary of credit cards. Compute an average daily balance. credit card impulse buying revolving charge account charge card Truth-in-Lending Act Fair Credit Billing Act. Fair Debt Collection Practices Act debit card

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4-4 CREDIT CARDS

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  1. 4-4CREDIT CARDS OBJECTIVES Becomefamiliar with the basic vocabulary of credit cards. Computean average daily balance.

  2. credit card impulse buying revolving charge account charge card Truth-in-Lending Act Fair Credit Billing Act Fair Debt Collection Practices Act debit card Electronic Funds Transfer Act average daily balance mean Key Terms

  3. Example 1 Frank lost his credit card in a local mall. He notified his creditor before the card was used. However, later in the day, someone found the card and charged $700 worth of hockey equipment on it. How much is Frank responsible for paying?

  4. CHECK YOUR UNDERSTANDING Carrie’s credit card was stolen. She didn’t realize it for days, at which point she notified her creditor. During that time, someone charged $2,000. How much is Carrie responsible for paying?

  5. Example 2 Credit card companies issue a monthly statement, therefore APR (annual percentage rate) must be converted to a monthly percentage rate. If the APR is 21.6%, what is the monthly interest rate?

  6. CHECK YOUR UNDERSTANDING If a monthly statement shows a monthly interest rate of x percent, express the APR algebraically.

  7. EXAMPLE 3 Rebecca did not pay last month’s credit card bill in full. Below is a list of Rebecca’s daily balances for her last billing cycle. For seven days she owed $456.11. For three days she owed $1,177.60. For six days she owed $990.08. For nine days she owed $2,115.15. For five days show owed $2,309.13. Find Rebecca’s average daily balance.

  8. CHECK YOUR UNDERSTANDING Last month, Paul had a daily balance of x dollars for 6 days, y dollars for 12 days, w dollars for q days, and d dollars for 2 days. Express the average daily balance algebraically.

  9. EXAMPLE 4 Rebecca (from Example 3) pays a finance charge on her average daily balance of $1,441.60. Her APR is 18%. What is her finance charge for this billing cycle?

  10. CHECK YOUR UNDERSTANDING Steve owes a finance charge this month because he didn’t pay his bill in full last month. His average daily balance is d dollars and his APR is p percent. Express his finance charge algebraically.

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