3.4B Credit Cards and Statements Worksheet

Front

What is the Average Daily Balance in credit card statements?

Back

The Average Daily Balance is a method used to calculate the interest on a credit card balance by averaging the daily balances over a billing cycle.

Front

How do you determine the New Balance on a credit card statement?

Back

The New Balance is calculated by taking the previous balance, adding any new purchases, and subtracting any payments or credits.

Front

What is included in the Payments/Credits box on a credit card statement?

Back

The Payments/Credits box includes any payments made towards the credit card balance and any credits applied to the account.

Front

What does the New Purchases box represent on a credit card statement?

Back

The New Purchases box shows the total amount of new charges made to the credit card during the billing cycle.

Front

What is the significance of the New Balance on a credit card statement?

Back

The New Balance indicates the total amount owed on the credit card at the end of the billing cycle, which is important for understanding how much to pay to avoid interest.

Front

How is interest calculated on a credit card balance?

Back

Interest is typically calculated based on the Average Daily Balance method, using the daily periodic rate applied to the average balance over the billing cycle.

Front

What factors can affect the New Balance on a credit card statement?

Back

Factors include new purchases, payments made, interest charges, and any fees applied during the billing cycle.

Front

What is the purpose of a credit card statement?

Back

A credit card statement provides a summary of the account activity, including transactions, payments, fees, and the total balance owed.

Front

What is the difference between a credit card's statement balance and the current balance?

Back

The statement balance reflects the total amount owed at the end of the billing cycle, while the current balance includes all transactions up to the present moment.

Front

What information is typically found in the summary portion of a credit card statement?

Back

The summary portion usually includes the previous balance, new purchases, payments/credits, interest charges, and the new balance.