Credit Card Statement Worksheet

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What is a credit card statement?

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A credit card statement is a monthly report provided by a credit card issuer that summarizes the transactions made on the card, including purchases, payments, interest charges, and the total balance owed.

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What does 'current balance' mean on a credit card statement?

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The current balance is the total amount of money that the cardholder owes to the credit card issuer at the time the statement is generated.

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How is interest calculated on a credit card?

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Interest on a credit card is typically calculated based on the average daily balance and the annual percentage rate (APR). The formula is: (Average Daily Balance) x (Daily Periodic Rate) x (Number of Days in Billing Cycle).

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What is a credit limit?

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A credit limit is the maximum amount of credit that a credit card issuer allows a cardholder to borrow on a credit card.

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What does it mean to charge an amount to a credit card?

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Charging an amount to a credit card means making a purchase using the credit card, which increases the cardholder's balance owed.

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What is the significance of making a payment on a credit card?

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Making a payment on a credit card reduces the balance owed and can help avoid interest charges if paid in full by the due date.

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What is the difference between the minimum payment and the total balance due?

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The minimum payment is the smallest amount a cardholder can pay to keep the account in good standing, while the total balance due is the full amount owed.

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What is the impact of late payments on a credit card account?

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Late payments can result in late fees, increased interest rates, and a negative impact on the cardholder's credit score.

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What is a billing cycle?

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A billing cycle is the period of time between credit card statements, typically lasting about 30 days.

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What is the purpose of a credit card's grace period?

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The grace period is the time during which a cardholder can pay off their balance without incurring interest charges, usually applicable if the previous balance was paid in full.