7.4 Bell Ringer

Front

Why is paying only the minimum balance on a credit card bad?

Back

It could take years to pay it off and you could end up paying triple what you took out on the credit card.

Front

What is the formula to calculate the finance charge on a credit card?

Back

Finance Charge = (Average Daily Balance) x (APR/365) x (Number of Days in Billing Cycle)

Front

What is the average daily balance if the daily balances for 31 days are $1,400 for 10 days, $1,900 for 10 days, and $2,700 for 11 days?

Back

$1,935.48

Front

What is a good reason to have a credit card?

Back

Building good credit by making on-time payments.

Front

What is the APR in finance?

Back

APR stands for Annual Percentage Rate, which is the annual rate charged for borrowing or earned through an investment.

Front

What does it mean to have a good credit score?

Back

A good credit score indicates that you are a responsible borrower, which can lead to better loan terms and lower interest rates.

Front

What is a finance charge?

Back

A finance charge is the cost of borrowing money, typically expressed as a percentage of the amount borrowed.

Front

What is the impact of late payments on your credit score?

Back

Late payments can significantly lower your credit score and affect your ability to borrow in the future.

Front

What is the difference between a credit card and a debit card?

Back

A credit card allows you to borrow money up to a limit, while a debit card withdraws money directly from your bank account.

Front

What is the purpose of a credit card statement?

Back

A credit card statement summarizes your transactions, payments, and any finance charges for a billing cycle.