Understand Your Credit Agreement

Review the Schumer box

Assume you’ve got a good credit: What would be your Annual Percentage Rate (APR) for purchases or balance transfers?

• 11.9%

• 15.9%

• 19.9%

Review the Schumer box

Assume you have a bad or poor credit: What would be your Annual Percentage Rate (APR) for purchases or balance transfers?

• 11.9%

• 19.9%

• 15.9%

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What is the annual fee for this credit card?

• $56

• $57

• $59

Review the Schumer box

If you are late paying your bill, what is the impact on your annual fee?

• Annual fee remains the same if you pay your bill late; it remains $59

• Annual fee will change- it will be higher.

• Annual fee will change- it will be lower

Review the Schumer box

If you are late paying your bill, what is the impact on your Annual PErcentage Rate (APR)?

• APR Goes to 56%

• APR Goes to 32%

• APR Goes to 24.9%

Review the Schumer box

If you are late paying your bill, are there any additional fees? If so, what?

• A $35 late payment fee, in addition to the APR increasing

• A late payment fee of $45

• No, there is no additional fee for late payment

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Minimum payment for a credit card is 3% of the balance. What would your likely minimum payment be for your sofa purchase?

• $1,100 * 0.03 = $ 33

• $3,500 * 0.03 = $ 105

• $3,500 * 0.03 = $100

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Assume you’ve got good credit:

a. How long would it take you to pay off the sofa purchase if you only made the minimum payment?

• 41 months

• 56 months

• 67 months

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Assume you’ve got good credit:

b. How much would you pay in interest over the length of your debt?

• $770.28

• $880

• $780

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Assume you’ve got poor credit:

a. How long would it take you to pay off the sofa purchase if you only made the minimum payment?

• 56 months OR 4 years and 7 months

• 49 months OR 4 years and 1 month

• 70 months OR 5 years and 10 months