For this lesson‘s assignment, you will select one of the activities below to complete and submit to your instructor. Read through each option before making your selection. If the links dont work I attached the file.
CHOICE ONE: HIDDEN COSTS OF CREDIT
The following terms are found on credit card disclosure statements.
- Annual Fee: The fee a credit card company charges for the use of their credit card.
- Credit Limit: The maximum amount of money the lender is willing to loan an applicant.
- Finance Charge: The total cost of using credit including interest and fees.
- Origination Fee: The charge for setting up a loan (often associated with home loans).
- Loan Term: The length of time you have to pay the loan. Remember, the longer the loan, the lower your monthly payment, the greater the interest paid.
- Grace Period: The length of time that the lender charges no interest on money borrowed when paying off your balance in full each month.
- Annual Percentage Rate: The cost of the loan each year expressed as a percentage. All lenders are required by law to calculate APR the same way.
- Introductory Rate: Lower interest rate offered by credit card companies, usually for a short period of time, to entice you to sign up for credit with them. Eventually, the rate expires and a new “increased” rate takes effect.
- Open and carefully review the Sample Disclosure Statement.
- Using the Sample Disclosure Statement, answer each of the following questions in a word processing document:
- Explain when this credit card company can adjust the APR.
- What is the annual fee for having this credit card?
- What is the Grace Period on this card?
- What is the Special Introductory Rate for this card?
- How much will it cost, in fees, to transfer a $1,000 balance to this card?
- What is the charge if you exceed your credit limit?
- What will your charge be if your payment is late and how will it affect your APR?
- Use your newly found knowledge to explain credit card disclosure statements to someone who has never reviewed one.
- Write a one to two paragraph explanation that teaches how to read a credit card disclosure statement.
- Include a minimum of four of the terms from the list above.
- You may explain without taking sides, or you can explain while indicating credit card debt is a bad idea.
- Submit the answers to the questions in number 2 and your one to two paragraph explanation as the assignment for this lesson.
Choice 1 Rubric
CHOICE TWO: MAKING THE MINIMUM
Scenario: Zach, a college freshman, recently received his first credit card, which he signed up for during orientation. He promised himself that he would use it only for emergencies. It is now the middle of December and Zach has to stop working for a couple weeks in order to finish some semester projects, study for and take his finals, and then, go home for the holiday break. Since he will not get a paycheck again until the next term in January, he had to use his credit card for the following “emergencies”:
|Gas for the drive back home||$55|
|Food (snacks for studying)||$45|
|Christmas gifts for family||$225|
|Books for next semester’s classes||$585|
Now, what will happen if Zach only makes the minimum payments on this one credit card? Assuming he charges nothing else and makes every minimum payment on time (two big assumptions), it will take him 155 months to pay for these “emergencies.”
- Open the Minimum Payment Schedule.
- In a new word processing document, answer the following questions:
- How much total interest will Zach pay?
- How many years of payments will he have?
- At what month does the monthly principal paid start to increase?
- How much (percentage) of Zach’s first year of payments is interest?
- At what month does Zach’s principal paid exceed the interest paid?
- Does this credit card have a minimum monthly payment, regardless of the balance? How can you tell?
- Can you figure out the interest rate of the card based on the information given for the first month? (Hint: APR is annual; the chart is computed monthly.)
- Answer the following question in a paragraph with a minimum of five sentences:
- How could Zach have avoided using a credit card even with the large expenses and time off from work?
Choice 2 Rubric
Responses and paragraph are complete and on topic. Responses are thoughtfully prepared, provide insight, and completely apply the principles discussed in the lesson.
Responses and paragraph are mostly complete and on topic. Responses are somewhat thoughtfully prepared, provide some insight, and mostly apply the principles discussed in the lesson.
Responses and paragraph are somewhat complete and/or strays from the topic. Responses lack appropriate amount of thought, have limited insight, and somewhat apply the principles discussed in the lesson.
Responses and paragraph are incomplete and/or strays from the topic. Responses lack thought, have limited insight, and inadequately apply the principles discussed in the lesson.
|21st century presentation skills||17–20 points
The work is wellorganized, easy to read and comprehend. It has few spelling or grammar errors.
The work is mostlyorganized, easy to read and comprehend. It has few spelling or grammar errors.
The work is somewhatorganized, easy to read and comprehend. It has somespelling or grammar errors.
The work lacksorganization, ease of reading and comprehension. It has many spelling or grammar errors.
04.08 DEBUNKING THE CREDIT MYTHS, PART 5
- Carefully review all videos in this lesson.
- Complete the reading and activities for this lesson.
- Select one choice assignment to complete.
- Submit either your Choice One document or Choice Two advertisement as assignment04.08 Debunking the Credit Myths Part 5.