Lesson eight

Credit cards

Overheads
Comparing credit cards

Card 1 Card 2 Card 3

Capital one Walmart MasterCard
American Express
Platinum
Gold Rewards Card
MasterCard

Annual fee of $150 No annual fee No annual fee

Annual Fee

1 month 1 month 21 days

Grace Period

19.89% is Our Preferred

APR 30% 19.75% on purchases Rate.
21.49% is the Cash Interest
Rate.
25.99% is the Standard
Rate.

Your initial credit limit is

Credit Limit No limit No limit specified in your package
that includes your first
Card.

Finance If you dont make your If you dont make your If you dont make your
payments, more interests payments within 60 payments, more interests
Charge
will be added to your days, your APR will go will be added to your
payments up to 27% payments

Method of Balance x APR x days in Balance x APR x days Balance x APR x days in
Calculating billing cycle / 365 in billing cycle / 365 billing cycle / 365
Finance Charges
average daily balance average daily balance average daily balance
method method method

Transaction No transaction fee No transaction fee $4 each time you conduct a

Fees transaction

Fees for Late

Payment Up to 2% more Up to $35 Up to $35
 Extended Warranty Earn cash back Use points for
Other Features
Plan on everyday purchases
Balance Protection purchases Fixed points travel
Plan program
Lesson eight
Credit cards

Student activities
 What did you find?

1. Which credit card has the highest annual percentage rate and how much is
it?

American Express Gold Card with 30% of APR.

2. What method is used to calculate the monthly finance charges for the first
major
Credit card?

The average daily balance method

3. When does the finance charge begin to accrue on the credit card from
the local department store?

After 21 days

4. Do any of the cards have annual fees?

Yes

If so, which one(s) and how much is the fee?

The American Express Gold Card does, an annual fee of $150

5. Is there a transaction fee on any card?

 Yes, on the Walmart MasterCard

If so, how much is it?

It is $4 each time you make a transaction

6. Is there a minimum finance charge on either of the major credit cards?

Yes, on all of them

If so, how much is it?

American Express Gold Card: More interests will be added

Capital one Platinum MasterCard: APR will go up to 27%

Walmart MasterCard: More interests will be added

7. Does the first major credit card charge a fee for late payments?

Yes

If so, how much is it?

Up to 2% more
8. What is the grace period on the credit card from the local department
store?

21 days

9. Jamel 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 youve found would you recommend Jamel use to
purchase the CD player?

The Capital one Platinum MasterCard

Why?

It has no annual fee to pay, has a lower annual percentage rate, it does not
have a credit limit, the grace period is for 1 month and it does not have any
transaction fee. Those are good benefits.
Shopping for credit (continued)

Use the following form to compare two or more credit cards:

card one card two

Walmart MasterCard American Express(Gold)

Type of account:
Credit card Credit Card Charge Card
Charge card
Company name, Walmart American Express
address, phone
1000 Guildford Town Centre, 1001 Austin Ave, Coquitlam, BC V3K
Surrey, BC V3R 1N3 3N9

(604) 581-1932 (604) 931-7447

Web site https://www.walmart.ca/en/finan https://www.americanexpress.com/ca/en

cial-services/walmart-rewards- /charge-cards/gold-rewards-card/
mastercard
Locations where Anywhere MasterCard are Anywhere with American Express
card is accepted accepted

Annual fee (if any) No annual fee $150

Grace period 21 days 1 month

Annual Percentage 19.89% is Our Preferred Rate. 30%

Rate (APR) 21.49% is the Cash Interest Rate.
25.99% is the Standard Rate.
Finance charge Balance x APR x days in billing Balance x APR x days in billing cycle
calculation method cycle / 365 / 365

average daily balance method average daily balance method

Credit limit Your initial credit limit is specified No limit
in your package that includes your
first Card.
Minimum payment 3% of balance or $10 Full amount

Other fees: Up to $35 Up to $35

Late payment