Credit Card Statement Analysis
A worksheet for Grade 12 students to analyze and understand credit card statements, focusing on key terms, calculations, and financial implications.
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Credit Card Statement Analysis
Name:
Date:
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Read each question carefully and provide your answers based on your understanding of credit card statements and financial principles. Show all your work for calculation questions.
1. Which of the following best describes the 'Annual Percentage Rate' (APR) on a credit card statement?
The yearly fee charged for having the credit card.
The interest rate charged on outstanding balances, expressed annually.
The minimum payment required each month.
The total amount of available credit.
2. What is the consequence of only paying the minimum payment on a credit card statement?
The outstanding balance will be cleared faster.
Interest charges will be avoided.
It will take longer to pay off the debt due to accruing interest.
The credit limit will automatically increase.
3. The is the date by which your payment must be received to avoid late fees and interest charges.
4. A is a charge added to your account if you spend more than your credit limit.
5. The total amount you owe on your credit card at the end of a billing cycle is called the .
6. Explain the difference between a credit limit and available credit.
7. Describe two financial benefits of paying your credit card balance in full every month.
8. A low credit utilization ratio is generally considered good for your credit score.
True
False
9. Cash advances typically have a lower interest rate than regular purchases.
True
False
10. Sarah has a credit card with an APR of 18% (1.5% monthly interest rate). Her previous balance was $500. She made a payment of $100 and then made a new purchase of $250. Assuming no other activity, calculate the following:
a) New Balance before interest:
b) Interest charged for the month (assume interest is calculated on the average daily balance, which for simplicity, can be considered the previous balance minus payments plus half of new purchases):
c) Total new balance including interest: