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Chapter 4, Section 1

Credit Card Costs. Chapter 4, Section 1. I CAN…. Identify important information about credit cards terms and conditions. Calculate the new balance on a credit card. Verify transactions on credit card statements. Calculate the cost of using a credit card. How do I know how much I owe?.

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Chapter 4, Section 1

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  1. Credit Card Costs Chapter 4, Section 1

  2. I CAN… • Identify important information about credit cards terms and conditions. • Calculate the new balance on a credit card. • Verify transactions on credit card statements. • Calculate the cost of using a credit card.

  3. How do I know how much I owe? • Each month the credit card company provides a statement to the credit card user that details: • Purchases • Fees • Payments and other credits • Total amount owed (including interest)

  4. What are the “credit terms & conditions”? • Something you should read BEFORE you sign up for a credit card! • They outline the costs associated with using the credit card—they usually have a disclosure box (example on p. 129).

  5. Can I use a credit card without having to pay “fees?” • YES! • If you pay your balance (how much you owe) in full by the due date you don’t have to pay interest! This is called the “grace period.” • However, other fees may apply to things such as cash advances, balance transfers, etc. • Example 1, p. 130 • Check your understanding A

  6. So what all is on a credit card statement? • Transactions- things such as purchases, payments made, and fees. • Credits- when an amount is subtracted from the total balance due. Ex: You purchased something with your card and then returned it back to the store OR a payment made. • Cash advance limits • Finance charges (also known as interest) • Statement closing date-last date on which transactions were posted. • APR • Minimum payment due • New balance = previous balance + (purchases/fees/ finance charges) – (payments/credits) • Example 2, p. 132 • Check your understanding C

  7. How do I make payments on my credit card? • Either by mail or online • Most companies have an online website available 24 hours a day. • It’s important to check often to ensure that there are no UNAUTHORIZED CHARGES on your account. • Example 3, p. 133 • Check your understanding E

  8. How much does it cost to use a credit card? • WAY TOO MUCH!!! • Example 4, . 133 • Check your understanding G & H

  9. Let’s practice! • P. 134-136, 12-22

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