Unit 4: Credit Card Costs

What is an annual fee? 

• The act of transferring money 
• A fee charged by a card issuer for being a card holder. 
• The days between the last statement and the current statement. 
• A fee charged to a cardholder's account once a payment is late. 

What is a finance charge?

• The amount of interest charged to an account for the billing cycle. 
• A fixed annual percentage rate of the finance charge.
• A charge from the bank for getting a credit card. 
• None of the above. 

Annual Percentage Rate (APR) is the yearly percentage rate of the finance charge. 

• True
• False 

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The act of transferring debt from one credit card account to another.

• Annual Transfers

• Balance Transfers

• Penalty APR

• Variable-Rate APR

If someone had a balance on their credit card of $327, and an APR of 24%, how much would they pay for the finance charge? Assume a 30 day billing cycle, using the daily rate.

• $10.55

• $2.75

• $196.20

• $6.45

If I have an 18% APR, what is my monthly INTEREST RATE?

• 1.5%
• 12%
• 18%
• 2.5%

If I have an 24% APR, what is my DAILY INTEREST RATE?

• 0.0007

• 1.1585

• 0.1800

• 0.02

Credit Card Balance: $1,250.00

APR: 22%

Days in Billing Cycle: 31

What would be the finance charge for the month? (Daily rate)

• $28.91

• $23.36

• $20.57

• $22.92

Balance - $10,000
Interest Rate - 2.7%
How much did you pay in interest?

• $270.00
• $280.00
• $275.00
• $273.00

You charge $500 on each of your two credit cards. One is American Express with an interest rate of 15.99%. The other is Chase Sapphire with an interest rate of 20.99%. Assuming that you are only making the minimum payment of $25 to each of the credit card companies, which card will you pay off first

• Chase Sapphire
• American Express
• Interest rate does not affect your minimum payments
• All of the above