Purpose of the Project:
This project is designed to illustrate the complete cost of keeping a credit card balance. Credit card abuse is by far the most destructive issue affecting people’s ability to become financially secure. If you have credit card debt, pay it off as quickly as possible. If you don’t have any credit card debt, congratulations! Don’t start accumulating it because it can be deadly.
Steps:
Purpose of the Project:
This project is designed to illustrate the complete cost of keeping a credit card balance. Credit card abuse is by far the most destructive issue affecting people’s ability to become financially secure. If you have credit card debt, pay it off as quickly as possible. If you don’t have any credit card debt, congratulations! Don’t start accumulating it because it can be deadly.
Steps:
Print and read these instructions. Print out answer sheet. You will input your answers into this Excel sheet and then upload.
Go Bankrate.com’s The True Cost of Paying the Minimum
https://www.bankrate.com/calculators/managing-debt/minimum-payment-calculator.aspx
The site has a form where you can put in credit card information which will calculate the amount of cost associated with carrying credit card debt. The higher the interest rate and the balance the more money you will ultimately lose.
Using this “Credit Card Calculator”, calculate the amount of money that will be lost in the form of interest and opportunity costs. I have provided an example for you. Use 2% as the minimum amount to pay with no other fixed amount.
Example
1
2
3
4
You (make up your own numbers)
Balance
10,000
2,000
750
1,500
3,200
Interest Rate
14%
16%
25%
16%
22%
Number of Months and Years until debt is paid
386 Months
= 32 years
Total payments
How much is interest?
$ 23,332
($10,000 Principle + $13,332 Interest)
$13,332
What did the results reveal to you? Write a brief summary on the effects of credit card debt on your overall financial health.
Using sources on the web, (quicken.com, money.com, yahoo finance, etc.) find the cheapest rate credit card available.
Bank________________________ Rate____________
Make certain to turn your work in by UPLOADING IT. The name of the file you submit should be Ch 5 Credit Card Mini Research