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October 16, 2018 Bell Ringer

October 16, 2018 Bell Ringer. Why do you think credit cards are so popular?. Credit Card Terms. Credit Card: a card that allows you to buy items now and pay for them later. Monthly statement: a bill sent every month to update you on the status of your credit card account.

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October 16, 2018 Bell Ringer

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  1. October 16, 2018 Bell Ringer Why do you think credit cards are so popular?

  2. Credit Card Terms • Credit Card: a card that allows you to buy items now and pay for them later. • Monthly statement: a bill sent every month to update you on the status of your credit card account. • Minimum payment: the least amount of your balance that you must pay each month to avoid a penalty charge. • Co-applicant: a person who applies with you for a credit card

  3. Credit Card Terms • Balance: the total amount of money you owe on your account. • Finance charge: a gee you pay each month for borrowing money; it is based on a certain percent of the balance not paid. • Annual percentage rate (APR): yearly interest rate used to find the interest due each month on the balance not paid. • Credit limit: the most money you can borrow on a credit card.

  4. Credit Card Terms • Available credit: the amount you can still charge on your card; the difference between the credit limit and the balance on your account. • Credit: the amount of a return or payment on a monthly statement. • Cash advance: the cash borrowed from a credit card account (usually very high interest rates).

  5. Should I Get a Credit Card? Advantages • Your monthly statement is a record of the items you buy. • You can buy things by using the telephone or internet. Also easy to close if worried about identity theft. • You can pay for thing in an emergency. • You are building credit if you use it responsibly.

  6. Should I Get a Credit Card? Disadvantages • You have to pay interest if you don’t pay the entire balance (usually high rate) • The money you pay in interest increases the cost of what you buy. How much did I really pay? • You may buy more than what you can afford.

  7. Assignment • If you pay the entire balance on every monthly statement, will you still owe interest charges on your credit card? Explain. • Does using a credit card lower the amount of credit you have left to use in that account? Explain. • Suppose you have a credit card. How can you avoid using it to buy more than you can afford?

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