Entry 21 - Shopping for Credit

A.

1. Credit card name (Visa, MasterCard, Discover, Kohl’s, etc.)
• Visa
• Discover
• Kohl’s
2. Type of Account
• Credit card
• Bank of America Visa
• Discover
• Charge card
• Kohl’s
3. Company name, address, phone
• Visa:
• Bank of America
• Phone: 877-831-6028
• Address: Glamour Shots - Chino Hills Marketplace, 4100 Chino Hills Pkwy Chino Hills, CA (909) 393-3002
• Discover
• Sears
• Phone: 800-628-1537
• Address: Chino Spectrum Marketplace, 4036 Grand Ave Chino, CA (909) 364-1802
• Kohl’s:
• Kohl’s
• Phone: 800-955-7070
• Address: Chino Spectrum Towne Center, 4093 Grand Ave Chino, CA (909) 591-8525

4. Website
• Visa:
• http://usa.visa.com/personal/personal-cards/credit-cards/basic-credit-cards.jsp
• http://www.bankrate.com/credit-cards/excellent-credit-cards.aspx
• https://consumer.bankofamerica.com/USCCapp/Ctl/entry?sc=VACCIV&GV12=H|869|A20005167712&GV10=H|874|4838&GV11=H|875|76#tc
• http://www.doifcuhb.org/home/loans/products/visa
• Discover:
• https://www.discovercard.com/application/displayLanding?pageFileId=listingsite-miles&sc=KD6Q&iq_id=e1A10005176156&cmpgnid=ls-dca-ccdc-consumer-miles-kd6q-dtop&pid=27
• http://www.creditcards.com/credit-cards/discover-it-14.php?catid=27
• http://creditcardforum.com/blog/discover-card-grace-period/
• Kohl’s:
• http://www.cardhub.com/d/kohls-card-1781c/#aprs

5. Locations where card is accepted
• Visa: Anywhere
• Discover: Anywhere
• Kohl’s: Kohl’s stores
6. Annual fee (if any)
• Visa: $0 for first year then $59
• Discover: $0
• Kohl’s: $0
7. Payment grace period
• Visa: 25 days
• Discover: 25 days
• Kohl’s :25 days
8. Annual Percentage Rate (APR)
• Visa: 12.99%-22.99%
• Discover: 10.99%-22.99%
• Kohl’s: 23.99%
9. Finance charge calculation method
• visa: Average Daily Balance  x  Annual Percentage Rate (APR)  x  Number of Days in Billing Cycle   ÷  365
• Discover: Average Daily Balance  x  Annual Percentage Rate (APR)  x  Number of Days in Billing Cycle   ÷  365
• Kohl’s:Average Daily Balance  x  Annual Percentage Rate (APR)  x  Number of Days in Billing Cycle   ÷  365
10. Credit limit
• Visa
• Usually $1000 at the start but it ultimately depends on the credit score
• Discover
• Usually $1000 at the start but it ultimately depends on the credit score
• Kohl’s
• Usually $500 at the start but it ultimately depends on the credit score
11. Minimum payment
• Visa
• 2.5% of new balance
• Discover
• 2% of new balance
• Kohl’s
• 2.5% of new balance
12. Other fees: (late payment or others that you find)
• Visa Late fee: $35
• Discover Late fee: $0 for first payment
• Kohl’s Late fee: $35
13. Other features: (??? – you tell me)
• Visa
• Excellent Credit
• Discover
• Cash back never expires
• Kohl’s
• Up to 30% discounts

B.

1. Which credit card has the highest annual percentage rate and how much is it?
1. Kohl’s
2. 23.99%
2. What method is used to calculate the monthly finance charge for the first major credit card?
1. Average Monthly Balance  x  Annual Percentage Rate (APR)  x  Number of Days in Billing Cycle   ÷  12

3. When does the finance charge begin to accrue on the credit card from the local department store?
1. It begins to accrue after at least 12 purchases. It accrues when ever purchases are made.
4. Do any of the cards have annual fees? If so, which one(s) and how much is the fee?
1. Visa charges $0 in the first year then it charges $59.
5. Is there a transaction fee on any card? If so, how much is it?
1. Visa has transaction fees that are either 10%, 5%, or 3% of the transaction.
6. Is there a minimum finance charge on either of the major credit cards? If so, how much is it?
1. None of the Major credit cards have a minimum finance charge.
7. Does the first major credit card charge a fee for late payments? If so, how much is it?
1. Yes, the Visa card charges a late fee.
2. The late fee is $35.
8. What is the grace period on the credit card from the local department store?
1. The grace period is 25 days.
9. Rafael wants to buy a new CD player that costs $450. According to his budget, he can afford payments up to $62.00 per month. Which of the three credit cards you’ve found would you recommend that Rafael use to purchase the CD player?  Explain why.
1. I would recommend the Discover card because it has a lower APR than Visa, a smaller minimum payment than the three cards, and the cash back rewards don’t expire.
10. In general, reflect on how making responsible financial decisions regarding borrowing and credit (debt) can lead to financial well-being over a lifetime.
1. Making responsible financial decisions will help in the long run. If I have less debt and I make my payments on time I would be more likely to get loans from the banks or get other benefits. Those could help me if I want to buy a house or start a business.

credit cards

Credit card stress