- Another Perspective on Wealth
- Setting Personal Goals
- Understanding and Managing Credit
- Introduction
- Learn About Credit Bureaus, Credit Reports, and Credit Scores
- Identify Appropriate Uses for Credit Cards and Explain How They Can Help You Achieve Your Financial Goals
- Learn How Credit Cards Work and Describe the Costs Involved
- Learn How to Manage Credit Cards and Open Credit
- Summary
- Assignments
- Conclusions 1: Learning to Give
- Conclusions 2: Decide to Decide
Case Study #2
Data
Steve carried an average daily balance of $600 this month. His balance last month was $1,000, and he made a $900 payment on the fifteenth of this month.
Calculations
Calculate the monthly interest charges for credit card accounts that charge interest rates of 10 percent, 16 percent, 18 percent, and 24 percent.
Fill in the following chart:
| 10% | 16% | 18% | 24% | |
| Average daily balance | $5.00 | _____ | _____ | _____ |
Application
Since the average daily balance is the most commonly used method of calculating balance, how important is it to get a low interest rate?
