QUIZ: Ch. 3.5 - 3.7 (Math for Finance)

Match the following

• Revolving Charge Account

• A card that allows the customer to borrow money repeatedly up to a certain limit.

• Credit Card

• A card that entitles its holder to make purchases and pay for them later.

• Average Daily Balance

• A card that deducts money directly from a checking account.

• Charge Card

• A card that requires the balance to be paid in full each month.

• Debit Card

• The average amount of money owed on a credit card account over a certain period of time.

Match the following

• Fair Credit Billing Act

• Displays key information about credit card fees, so consumers can easily read it and compare credit cards.

• Truth-In-Lending Act

• A law that protects consumers from unfair and abusive means to collect the money owed.

• Fair Debt Collection Practice Act

• A law that protects debit card users from unauthorized debit card transactions, if it's determined to be lost or stolen.

• Electronic Funds Transfer Act

• A law that protects you if there's any errors in your monthly billing statement.

• Schumer Box

• A law that offers protection if a credit card is lost or stolen.

According to the law, what is the maximum liability you have to pay on your credit card if someone steals it and makes, say, $400 worth of purchases?

Tags

CCSS.7.RP.A.3

Match the following

• Credit Card Statement

• A recap of all the credit card user's credits and debits that occurred throughout the month.

• Credit Line

• The max. amount that a person can owe (or spend) on a credit card at one time, whether it's one big purchase or several small purchases.

• Billing Cycle

• When the monthly payment must be received by the credit card company.

• Payment Due Date

• When the credit card statement was written by and mailed out to the account holder.

• Billing Date

• A predetermined set of time set up by the credit card company that is used for calculating a credit card bill, such as the average daily balance.

Tags

CCSS.6.NS.C.7C

Match the following

• Account Number

• The difference between the max. amount you're allowed to charge to your credit card and the actual amount owed on the card.

• Debits

• An amount charged to a credit card account.

• Available Credit

• A unique number that identifies a credit card holder.

• Credits

• A payment made to reduce your debt AND can count as a refund if you return the item you purchased back to the merchant.

Tags

CCSS.6.NS.C.7C

Match the following

• Minimum Payment

• This tells you the total amount of money due for the current billing period.

• Finance Charge

• This is a fee charged on a credit card for the convenience of extra payment time.

• Previous Balance

• Any money owed prior to the current billing period; it could be from last month or several months before.

• Late Charge

• This is a penalty for making a payment AFTER the due date.

• New Balance

• This tells you the smallest amount of money that must be paid in order to keep your account in good standing.

Tags

CCSS.5.NBT.A.2

For Nick's 18th birthday, his parents gave him permission to open up a credit card account to help build his credit score. As soon as Nick received his credit card in the mail, a random person walked by and snatched it out of his hands. That person immediately ran over to Staples to purchase $125 worth of "That Was Easy" buttons.

Nick was able to reach his bank and cancel the credit card before the thief charged the credit card at the store. Later that day, the thief was caught and imprisoned by law enforcement (That Was Easy, haha!!). Out of the $125 that was charged to the credit card, how much is Nick responsible for paying back to the credit card company, at least until the criminal is prosecuted in court?

• $25

• $50

• $100

• $125

• $0

Tags

CCSS.6.NS.C.5

Alexander: Good credit score - 12% APR

Matthew: Poor credit score - 18% APR

If each of them carry an average daily balance of $1,100 for a specific month, and they both had to pay a finance charge, how much more would Matthew have to pay on his finance charge than Alexander? (**Don't forget to use the MONTHLY APR when doing your calculations**)

Tags

CCSS.6.RP.A.3C

You swipe your credit card a handful of times and decide not to make any payments for the entire month. Why? Because you bet your brother your ENTIRE Savings Account that the Gators would win a football game against Georgia and, welp, they didn't. You have no money, your brother has it all. Just look at all that money flowing into your brother's Venmo account. Look how happy he is! (*See picture on left).

Using the numbers below, let's calculate his average daily balance from his credit card balance over the the past month. Each dollar amount represents how much he owed the credit card company and for how many days out of the month: (*for example, for 6 days out of the month, your brother owed the credit card company $250. Then he went out and spent another $140, which resulted him owing the credit card company a total of $390 for the next 9 days. And so on...)

6 days @ $250

9 days @ $390

12 days @ $465

4 days @ $515

Tags

CCSS.7.NS.A.3

Tags

CCSS.6.EE.B.7