Questions from Personal Finance

Q: Discuss how credit cards offer incentives to use the cards. How

Discuss how credit cards offer incentives to use the cards. How else might credit card companies reward cardholders with excellent credit ratings?

Q: What is a grace period? How can you use it to

What is a grace period? How can you use it to your advantage?

Q: What is a cash advance? How are they commonly obtained?

What is a cash advance? How are they commonly obtained? Discuss interest rates and grace periods with regard to cash advances.

Q: How does the interest rate affect your credit payments? What is

How does the interest rate affect your credit payments? What is meant by simple interest? What is the annual percentage rate (APR), and when is it used?

Q: List some items that appear on the credit card statement. What

List some items that appear on the credit card statement. What accounts for the difference between your previous balance and your new balance?

Q: What should you consider when comparing credit cards?

What should you consider when comparing credit cards?

Q: List five tips for using credit cards wisely.

List five tips for using credit cards wisely.

Q: Why is paying your credit card balance in full so important?

Why is paying your credit card balance in full so important? What should you do if you can’t avoid credit card debt? Explain.

Q: Describe the budget method to determine the amount of life insurance needed

Describe the budget method to determine the amount of life insurance needed. What elements must be considered in making this calculation?

Q: What are the three methods used by financial institutions to calculate finance

What are the three methods used by financial institutions to calculate finance charges on outstanding credit card balances? Briefly describe how interest is computed under each method.