Compound Interest Worksheet Analysis

Credit cards have become increasingly popular world-wide, making it easier to buy now and pay later but are they actually helping or hindering someone’s credit? “Maxed Out” by James D. Scurlock demonstrates how credit cards can hurt someone’s credit, while “Why Won’t Anyone give Me a Credit Card” by Kevin O’Donnell demonstrates how someone may have financial stability to pay off a credit card, but still be consistently denied one by the credit card companies. Owning credit cards is not the problem; the problem is being irresponsible with it.

There are both pros and cons to spending with credit. A consumer must be responsible for their spending and plan ahead for the future. Many people are quickly swept with debt a short period after receiving a credit card. Other consumers are wise enough to control their spending and limit their purchases.

Credit cards can ruin any financial situation if used improperly. Let’s look at what our two financial authorities think about them. Dave Ramsey is completely against the idea of using credit cards. Being a devout Christian, he often finds his ways of financial teaching through The Bible. Proverbs 22:7 states “The rich rule over the poor, and the borrower is slave to the lender.” You are charged a premium for using a credit card in the form of interest. While you can pay off credit before the interest is charged, Dave insists that many people do not pay if off in time. It is better to get rid of the enticement altogether than to play with the idea of using a

Currently, I don’t have a credit card. All of my payments are made in cash of with my debit card. In the last lecture we learned that it is a good idea to get a credit card young so the credit can start building. Mr. Klassen says that he uses his card for the necessities that he has to buy anyway such as gas and groceries. I would like to implement that in my own spending habits once I get a credit card. I would keep my balances low by being responsible with how I use my card. In addition, I will start out with only one credit card. There is a lot of temptation to open up many cards with different companies, but with one card it is easier to keep track of your

According to the retired CPA I interviewed, the three most important concepts for a young college student to understand are: (1) Credit History and Credit Scoring, (2) Financing Charges, and (3) the Annual Percentage Rate (APR) of Interest. As they relate to considering which credit card to use, my interview subject suggested that the most important factor is how using that card might affect my credit history in the long term, what the financing charges could be on purchases that are not paid off immediately or very soon after the initial purchase, particularly as a function of the APR.

Lower interest rates aren't always better than short-term, higher interest loans. When you get one of these loans --even though the interest rate is higher -- you're more likely to pay off the loan as quickly as possible. Credit card debt and loans from traditional lenders usually don’t generate the same urgency to repay the debt, so people might carry the debt for years and continue to pay interest charges. According to a MarketWatch.com report, paying minimum payments on $2,000 in debt would take 30 years or 370 months to pay off at an 18-percent interest rate. You would pay $4,931 in interest during the repayment period, which might take the rest of your life even if you don’t use the card to buy anything

During the Financial Fitness module I learned more about my credit score and how to improve it. I also learned the different ways a credit score is made up of. A credit score is usually used to see how likely you are to pay back money that you owe. Usually banks use them to issue loans or credit card companies’ use it to decide if they want to give you a credit card and how much they want to set your limit to. It is important to build your credit score up because it will benefit you in the future when you need to borrow money or even get a job. Some jobs check your credit score before they hire you. Also if you don’t pay a bill your credit score will go down after 30 days past the due date. Some advice I learn was to get a credit card when

A credit card is like a double-edged knife. Would be nice if we are wise to use it, otherwise, would be evil if used to go into debt in order to fulfill our wishes. Then what should be done so that we can immediately pay off the debt? Here is an example of a simulation of the repayment of a credit card. I hope this simulation can be useful to you. For example, suppose you earn around $ 4,000 per month and have 2 credit cards. You owe to the first credit card for $ 800 with interest of 3.75% per month and to the second credit card for $ 500 with 4% interest.

In the world of personal finances, credit cards play an important roles in lives of many people. Sometimes, it's out of choice while other times it happens out of necessity. Regardless of why it happens, the numbers surrounding credit card debt are worthy of scrutiny in order to determine whether having or using credit cards is a sound financial decision.

As people get older, everyone tends to apply for credit. It is much simpler and easy to make larger purchases. Although, strict actions must be made, it is a full time responsibility and you must have the independence, organization and knowledge to receive credit. To use credit wisely, it is smart to first know what you are getting yourself into. Ask family members, friends, or financial institution any question you may have. Receive all the information you need before receiving your credit. Also, make sure that you are willing and financially able to pay back any money, plus interest and fees that may come from a credit card. Make sure that you will not be behind on paying bills, or be irresponsible with how you are managing your credit. A time I used credit wisely, was when I wanted to purchase a very expensive Michael Khors purse from their new collection.

Firstly, not using credit card is the utmost issue which needs avoiding in order to be rich in the future. As regards credit cards, there are billions of people using it around the world. The purpose of credit card is for convenience, that the owner of the credit card can spend money at any time without handing cashes, which attract many thieves and criminals in busy places. Furthermore, it is not necessary for the credit cards owners to have actual budgets of money to purchase goods and services, for they can borrow loan through the card and pay the lender later. In my opinion, I think it is very good to fulfill my wants immediately before having enough money to afford it, yet in return for the comforts which a credit card fetches me, I have accumulated a fortune of debts. The debt may be dismal, thus extraneous to raise the credit

Let’s say you owe $1000 on your credit card and you have a minimum payment due of $25 and you are being charged 19% interest. How long do you think it would take you to pay it off by just making the minimum payments? The answer is 7 years according to the February 2005 issue of University Wire. And for the first year you

I can plug the numbers from the given information above into Stitz and Zeager’s (2011, p. 470) compound interest equation:

Did you know according to “collegeparents.org”, “in 2009, over 84 percent of undergraduates had at least own a credit card” (collegeparents.org para4). And from that “over 50 percent of students had 4 or more credit cards” (Ghahremani para4). Even though as you mentioned, having a credit card makes you purchase items that are not needed, more importantly it will help you build your credit. And also when it comes to buying a car or even renting a car or a hotel, purchasing a house, or even applying for a student loan, the first factor they look for is your credit history. Some credit cards, such as cash back or rewards card even give you a little extra money for using them, which is not bad to save some money without even noticing. On the down side, a lot of people who get credit cards, end up spending more money than their income. But then once they realized they have exceeded their limit, they blame on the credit card and not to themselves for purchasing unwanted items.

Making minimum monthly payments on your credit card will get you nowhere but further in debt with no way out. •