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College Prep Economics Unit 5, “Measuring Economic Performance” “Credit Card Project”

In this project, you will discover how credit cards work and the potential dangers of misusing credit cards.

DIRECTIONS:

You will “make payments” for three (3) credit cards.

You will keep track of the payments made, the interest charged, and your new balance.

You will have BOTH a “rough” draft and a typed copy of the information.

You will calculate the interest paid for each credit card as well as the total amount charged on each credit card,

CREDIT CARDS

CREDIT CARD #1 (OR A): High interest credit card with a minimum payment.

CREDIT CARD #2 (OR B): Lower interest credit card with a minimum payment.

CREDIT CARD #3 (OR C): Higher interest credit card with a higher than minimum payment.

DEFINE THE FOLLOWING TERMS: Annual fee / Annual percentage rate (APR) / Authorized user / Automated Teller Machine (ATM) / Balance Transfer / Balance transfer fee / Bankruptcy / Billing statement / Cash cards / Credit available / Credit line / Debit card / Fair Credit Billing Act / Finance charge / Fixed interest rate / Grace period / Incentive offers / Minimum payment / Monthly periodic rate / Payment due date / Secured credit card / Transaction fees / Truth-in-Lending Act / Variable interest rate

CONCLUSION:

In a well written conclusion using the Jane Schaffer format, answer the following question:

“Why Should You Be Careful With Credit Cards?”

NOTES: Size 12 New Times Roman font, double-spaced, in “the colors”, and with a “green” section that defends your views and should be more than 3 sentences long.

TITLE PAGE: Pictures (6) showing what you would use the credit card for. Be sure to tell what the picture is about. Pictures (3) showing the dangers of misusing credit cards.

Credit Card Calculations

PAYMENT--New Balance x .03399 INTEREST--Balance #1 x 0.015836 NEW BALANCE:--Balance #1 + Interest

BALANCE #2--New Balance – Payment + New Debt

CREDIT CARD “A’ NEW DEBTS Annual Percentage Rate (19%) Monthly Interest Rate (0.015836)

01/01/08---$1500.00 06/01/08---$140.98 07/01/08---$350.00 12/01/08---$294.99 03/01/09---$31.95 06/01/09---$465.67 12/01/09---$637.06 05/01/10---$50.00 07/01/10---$80.92 10/01/10---$20.00

01/01/11---$99.31 07/01/11---$118.75 01/01/12---$136.70 07/01/12---$154.60 01/01/13---$17.19

08/01/13---$18.85 02/01/14---$204.43 08/01/14---$153.72 02/01/15---$143.95 09/01/15---$133.20

03/01/16---$121.40 10/01/16---$1084.27 03/01/17---$279.99 06/01/17---$288.32 04/01/18---$2951.05

09/01/18---$300.19 05/01/19---$303.41

As of June 1, 2019, your credit card account has been frozen. You will not be able to use your credit card to charge additional purchases. Because of the law, you are unable to file for bankruptcy and must pay off the account. Failure to do so may mean that your wages will be “garnished” or you will have your personal property sold at auction to pay off some of the balance you owe. You are responsible for all charges, interest, and late fees. Your credit rating has suffered as no one will give you credit for anything.

Credit Card “B” $30.00/month—Annual Percentage Rate (13%) – Monthly Interest Rate (0.01083)—

No NEW DEBTS

Credit Card “C” $100.00/month—Annual Percentage Rate (19%)—Monthly Interest Rate (0.015836)—

No NEW DEBTS

DATE—BALANCE #1—INTEREST—NEW BALANCE—PAYMENTS—NEW DEBTS—BALANCE #2

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