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Credit Cards

Credit Cards. Procedures:. Procedures:. Typically have ABOUT ONE MONTH from the statement date to pay No interest if the balance is paid by the due date Have a minimum payment amount May charge above the credit limit High fees if not below credit limit by statement date. Fees:. Fees:.

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Credit Cards

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  1. Credit Cards

  2. Procedures:
  3. Procedures: Typically have ABOUT ONE MONTH from the statement date to pay No interest if the balance is paid by the due date Have a minimum payment amount May charge above the credit limit High fees if not below credit limit by statement date
  4. Fees:
  5. Fees: Some have a monthly fee just to have the card Balance Transfer Fees Cash Advance Fees Fraud Insurance Foreign Transaction Fees Reward Redemption Fees Inactivity Fees Paper Statement Fees Payment Protection Plans
  6. Interest: Interest is the primary source of income for credit cards Do not charge interest if the balance is paid by the due date Based upon an average daily balance
  7. Average Daily Balance: Average Daily Balance:
  8. Average Daily Balance: Average Daily Balance: An average of the ending balances for each day of the month
  9. Average Daily Balance: Average Daily Balance: An average of the ending balances for each day of the month To Calculate: 1.) Multiply each balance by the number of days which ended with that balance
  10. Average Daily Balance: Average Daily Balance: An average of the ending balances for each day of the month To Calculate: 1.) Multiply each balance by the number of days which ended with that balance 2.) Add together the products from Step 1
  11. Average Daily Balance: Average Daily Balance: An average of the ending balances for each day of the month To Calculate: 1.) Multiply each balance by the number of days which ended with that balance 2.) Add together the products from Step 1 3.) Divide by the number of days in the month
  12. Example: Calculate the Average Daily Balance
  13. Interest Formula: I = Interest Amount B = Average Daily Balance r = Interest Rate n = # of days in the billing cycle
  14. Example: Calculate Interest AmountInterest Rate = 19.99%
  15. Minimum Payment Calculation:
  16. Minimum Payment Calculation: Multiply the Outstanding Balance by the APR
  17. Minimum Payment Calculation: Multiply the Outstanding Balance by the APR Multiply the Outstanding Balance by 1%
  18. Minimum Payment Calculation: Multiply the Outstanding Balance by the APR Multiply the Outstanding Balance by 1% Add the product from Step 1 to the product from Step 2 and any additional fees
  19. Example: Calculate the minimum payment amount Outstanding Balance: $4,000 APR: 19.99% Additional Fees: $10.00 – Foreign Transaction
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