# Credit Card to The Max

Paper, Order, or Assignment Requirements

Using www.cardhub.com, and the Principal and Interest chart in Moodle, please solve the following case study.

You are 22 years old and just out of college. You have a good job at a modest starting salary of \$35,000 in an advertising firm. You have good credit, a score of 720. You are trying to figure out the best strategy for your credit card and debt management strategy.

Credit Cards To The Max

A case study in making good credit card decisions

Professor Compton

Fin Lit 102

Using www.cardhub.com, and the Principal and Interest chart in Moodle, please solve the following case study.

You are 22 years old and just out of college. You have a good job at a modest starting salary of \$35,000 in an advertising firm. You have good credit, a score of 720. You are trying to figure out the best strategy for your credit card and debt management strategy.

You have \$500 total budgeted for all debt repayment per month!

1. \$1000 on Card A. Interest rate is 12.9% and your minimum payment is \$45 a month. Your credit limit on this card is \$1500.

1. \$500 on Card B. Interest rate is 8.9% and your minimum payment is \$25 a month. Your credit limit on this card is \$1500.

1. \$2500 on Card C. Interest rate is 24% because you missed a payment and the minimum payment is \$98 a month. Your credit limit on this card is \$2700.

Student Loan Debt:

Your student loan debt is \$22,000 and you have your first payment coming up.

Using these factors, figure out what your monthly payment will be:

5% interest

10 years repayment

12 payments per year

 Initial Data LOAN DATA TABLE DATA Loan amount: \$22,000.00 Table starts at date: Annual interest rate: 5.000% or at payment number: 1 Term in years: 10 Payments per year: 12 First payment due: 1/1/1997 PERIODIC PAYMENT Entered payment: \$0.00 The table uses the calculated periodic payment amount, Calculated payment: \$233.34 unless you enter a value for “Entered payment.” CALCULATIONS Use payment of: \$233.34 Beginning balance at payment 1: \$22,000.00 1st payment in table: 1 Cumulative interest prior to payment 1: \$0.00 Table Payment Beginning Ending Cumulative No. Date Balance Interest Principal Balance Interest 1 1/1/1997 22,000.00 91.67 141.68 21,858.32 91.67 2 2/1/1997 21,858.32 91.08 142.27 21,716.05 182.74 3 3/1/1997 21,716.05 90.48 142.86 21,573.19 273.23 4 4/1/1997 21,573.19 89.89 143.46 21,429.74 363.11 5 5/1/1997 21,429.74 89.29 144.05 21,285.68 452.41 6 6/1/1997 21,285.68 88.69 144.65 21,141.03 541.10 7 7/1/1997 21,141.03 88.09 145.26 20,995.77 629.18 8 8/1/1997 20,995.77 87.48 145.86 20,849.91 716.67 9 9/1/1997 20,849.91 86.87 146.47 20,703.44 803.54 10 10/1/1997 20,703.44 86.26 147.08 20,556.36 889.80 11 11/1/1997 20,556.36 85.65 147.69 20,408.67 975.46 12 12/1/1997 20,408.67 85.04 148.31 20,260.36 1,060.49 13 1/1/1998 20,260.36 84.42 148.93 20,111.44 1,144.91 14 2/1/1998 20,111.44 83.80 149.55 19,961.89 1,228.71 15 3/1/1998 19,961.89 83.17 150.17 19,811.72 1,311.88 16 4/1/1998 19,811.72 82.55 150.80 19,660.93 1,394.43 17 5/1/1998 19,660.93 81.92 151.42 19,509.50 1,476.35 18 6/1/1998 19,509.50 81.29 152.05 19,357.45 1,557.64 19 7/1/1998 19,357.45 80.66 152.69 19,204.76 1,638.30 20 8/1/1998 19,204.76 80.02 153.32 19,051.43 1,718.32 21 9/1/1998 19,051.43 79.38 153.96 18,897.47 1,797.70 22 10/1/1998 18,897.47 78.74 154.60 18,742.87 1,876.44 23 11/1/1998 18,742.87 78.10 155.25 18,587.62 1,954.53 24 12/1/1998 18,587.62 77.45 155.90 18,431.72 2,031.98 25 1/1/1999 18,431.72 76.80 156.55 18,275.18 2,108.78 26 2/1/1999 18,275.18 76.15 157.20 18,117.98 2,184.93 27 3/1/1999 18,117.98 75.49 157.85 17,960.13 2,260.42 28 4/1/1999 17,960.13 74.83 158.51 17,801.62 2,335.25 29 5/1/1999 17,801.62 74.17 159.17 17,642.45 2,409.43 30 6/1/1999 17,642.45 73.51 159.83 17,482.61 2,482.94 31 7/1/1999 17,482.61 72.84 160.50 17,322.11 2,555.78 32 8/1/1999 17,322.11 72.18 161.17 17,160.94 2,627.96 33 9/1/1999 17,160.94 71.50 161.84 16,999.10 2,699.46 34 10/1/1999 16,999.10 70.83 162.51 16,836.59 2,770.29 35 11/1/1999 16,836.59 70.15 163.19 16,673.40 2,840.44 36 12/1/1999 16,673.40 69.47 163.87 16,509.53 2,909.91 37 1/1/2000 16,509.53 68.79 164.55 16,344.97 2,978.70 38 2/1/2000 16,344.97 68.10 165.24 16,179.73 3,046.81 39 3/1/2000 16,179.73 67.42 165.93 16,013.80 3,114.22 40 4/1/2000 16,013.80 66.72 166.62 15,847.18 3,180.95 41 5/1/2000 15,847.18 66.03 167.31 15,679.87 3,246.98 42 6/1/2000 15,679.87 65.33 168.01 15,511.86 3,312.31 43 7/1/2000 15,511.86 64.63 168.71 15,343.15 3,376.94 44 8/1/2000 15,343.15 63.93 169.41 15,173.73 3,440.87 45 9/1/2000 15,173.73 63.22 170.12 15,003.61 3,504.10 46 10/1/2000 15,003.61 62.52 170.83 14,832.78 3,566.61 47 11/1/2000 14,832.78 61.80 171.54 14,661.24 3,628.42 48 12/1/2000 14,661.24 61.09 172.26 14,488.99 3,689.50 49 1/1/2001 14,488.99 60.37 172.97 14,316.01 3,749.87 50 2/1/2001 14,316.01 59.65 173.69 14,142.32 3,809.52 51 3/1/2001 14,142.32 58.93 174.42 13,967.90 3,868.45 52 4/1/2001 13,967.90 58.20 175.14 13,792.76 3,926.65 53 5/1/2001 13,792.76 57.47 175.87 13,616.88 3,984.12 54 6/1/2001 13,616.88 56.74 176.61 13,440.27 4,040.86 55 7/1/2001 13,440.27 56.00 177.34 13,262.93 4,096.86 56 8/1/2001 13,262.93 55.26 178.08 13,084.85 4,152.12 57 9/1/2001 13,084.85 54.52 178.82 12,906.03 4,206.64 58 10/1/2001 12,906.03 53.78 179.57 12,726.46 4,260.42 59 11/1/2001 12,726.46 53.03 180.32 12,546.14 4,313.44 60 12/1/2001 12,546.14 52.28 181.07 12,365.07 4,365.72 61 1/1/2002 12,365.07 51.52 181.82 12,183.25 4,417.24 62 2/1/2002 12,183.25 50.76 182.58 12,000.67 4,468.00 63 3/1/2002 12,000.67 50.00 183.34 11,817.33 4,518.01 64 4/1/2002 11,817.33 49.24 184.11 11,633.22 4,567.24 65 5/1/2002 11,633.22 48.47 184.87 11,448.35 4,615.72 66 6/1/2002 11,448.35 47.70 185.64 11,262.71 4,663.42 67 7/1/2002 11,262.71 46.93 186.42 11,076.29 4,710.35 68 8/1/2002 11,076.29 46.15 187.19 10,889.10 4,756.50 69 9/1/2002 10,889.10 45.37 187.97 10,701.12 4,801.87 70 10/1/2002 10,701.12 44.59 188.76 10,512.37 4,846.46 71 11/1/2002 10,512.37 43.80 189.54 10,322.82 4,890.26 72 12/1/2002 10,322.82 43.01 190.33 10,132.49 4,933.27 73 1/1/2003 10,132.49 42.22 191.13 9,941.37 4,975.49 74 2/1/2003 9,941.37 41.42 191.92 9,749.44 5,016.91 75 3/1/2003 9,749.44 40.62 192.72 9,556.72 5,057.53 76 4/1/2003 9,556.72 39.82 193.52 9,363.20 5,097.35 77 5/1/2003 9,363.20 39.01 194.33 9,168.87 5,136.37 78 6/1/2003 9,168.87 38.20 195.14 8,973.73 5,174.57 79 7/1/2003 8,973.73 37.39 195.95 8,777.77 5,211.96 80 8/1/2003 8,777.77 36.57 196.77 8,581.00 5,248.53 81 9/1/2003 8,581.00 35.75 197.59 8,383.41 5,284.29 82 10/1/2003 8,383.41 34.93 198.41 8,185.00 5,319.22 83 11/1/2003 8,185.00 34.10 199.24 7,985.76 5,353.32 84 12/1/2003 7,985.76 33.27 200.07 7,785.69 5,386.60 85 1/1/2004 7,785.69 32.44 200.90 7,584.79 5,419.04 86 2/1/2004 7,584.79 31.60 201.74 7,383.05 5,450.64 87 3/1/2004 7,383.05 30.76 202.58 7,180.46 5,481.40 88 4/1/2004 7,180.46 29.92 203.43 6,977.04 5,511.32 89 5/1/2004 6,977.04 29.07 204.27 6,772.77 5,540.39 90 6/1/2004 6,772.77 28.22 205.12 6,567.64 5,568.61 91 7/1/2004 6,567.64 27.37 205.98 6,361.66 5,595.98 92 8/1/2004 6,361.66 26.51 206.84 6,154.83 5,622.49 93 9/1/2004 6,154.83 25.65 207.70 5,947.13 5,648.13 94 10/1/2004 5,947.13 24.78 208.56 5,738.56 5,672.91 95 11/1/2004 5,738.56 23.91 209.43 5,529.13 5,696.82 96 12/1/2004 5,529.13 23.04 210.31 5,318.82 5,719.86 97 1/1/2005 5,318.82 22.16 211.18 5,107.64 5,742.02 98 2/1/2005 5,107.64 21.28 212.06 4,895.58 5,763.30 99 3/1/2005 4,895.58 20.40 212.95 4,682.63 5,783.70 100 4/1/2005 4,682.63 19.51 213.83 4,468.80 5,803.21 101 5/1/2005 4,468.80 18.62 214.72 4,254.07 5,821.83 102 6/1/2005 4,254.07 17.73 215.62 4,038.46 5,839.56 103 7/1/2005 4,038.46 16.83 216.52 3,821.94 5,856.38 104 8/1/2005 3,821.94 15.92 217.42 3,604.52 5,872.31 105 9/1/2005 3,604.52 15.02 218.33 3,386.19 5,887.33 106 10/1/2005 3,386.19 14.11 219.23 3,166.96 5,901.44 107 11/1/2005 3,166.96 13.20 220.15 2,946.81 5,914.63 108 12/1/2005 2,946.81 12.28 221.07 2,725.74 5,926.91 109 1/1/2006 2,725.74 11.36 221.99 2,503.76 5,938.27 110 2/1/2006 2,503.76 10.43 222.91 2,280.85 5,948.70 111 3/1/2006 2,280.85 9.50 223.84 2,057.01 5,958.20 112 4/1/2006 2,057.01 8.57 224.77 1,832.23 5,966.78 113 5/1/2006 1,832.23 7.63 225.71 1,606.52 5,974.41 114 6/1/2006 1,606.52 6.69 226.65 1,379.87 5,981.10 115 7/1/2006 1,379.87 5.75 227.59 1,152.28 5,986.85 116 8/1/2006 1,152.28 4.80 228.54 923.73 5,991.65 117 9/1/2006 923.73 3.85 229.50 694.24 5,995.50 118 10/1/2006 694.24 2.89 230.45 463.79 5,998.40 119 11/1/2006 463.79 1.93 231.41 232.38 6,000.33 120 12/1/2006 232.38 0.97 232.38 0.00 6,001.30

Now is the time to really think about what you’ve learned. Take some time and answer the following questions:

1. Using cardhub.com, which 2 cards have the best offer for 0% balance transfer based on your credit and why?

1. Using cardhub.com, which 2 cards have the best offer for 0% purchases based on your credit and why?

1. You need to purchase \$500 in new tires for your car. Do you put it on a current card, or do you get a new card , why, and which card would you use if you choose that?

1. If you transferred to a new card there is a 3% transfer fee on the amount. How much would you transfer, and what would the fee be?

1. Where would you apply the balance of your monthly budgeted amount to reduce your credit card debt and why?