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9 IYM: Teenagers and Credit Cards
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by Nicole O'Brien
| 10 Questions
Note from the author:
Credit Cards
1
10 pts
Credit is an arrangement to receive cash, goods, or services now and pay for them in the future?
True
False
2
10 pts
Case Study: Alex is a student with a part time job at McDonalds. He earns $120 a week and manages to save about $50 in his savings account. He recently got approval for a credit card with a credit limit of $1000.00. For the first 6 months of receiving the card, he rarely used it, except to pay for some books for school online. Then over the summer holidays he started using it more often as it was a quick and convenient way of shopping. In one month his credit card racked up the following expenses;- · Boxing Day sale a new XBOX1 - price $499.00 · Domino’s Pizza - $24 · McDonalds – $12.95 · Ticket for Good Life music festival - $95.00 · Village Cinema tickets X 2 - $ 38.00 · Assassins Creed Game:- $89.00 · Rock climbing: - $18.95 · Annual fee: - $48.00 Total: $ 824.90 a) Using the credit card calculator, how long it will take Alex to pay off this amount: https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/credit-card-calculator Interest rate: 19.49% length of time if he pays minimum amount? Higher Repayments?

Interest rate: 13.49%
length of time if he pays minimum amount?

Higher Repayments?
3
10 pts
Sam has $3,000 owing on his credit card at 16.5% interest. If he pays only the 'minimum payment due' each month as shown on the card statement, how long will it take him to pay off the whole amount? https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/credit-card-calculator
approx. 4 years
approx. 21 years
approx. 10 years
4
10 pts
1.If Laura deposited $20 a week in a high interest savings account with an interest rate of 6% for her newborn son, how much money would her son have when he turns 21? https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/compound-interest-calculator
approx. $ 41,000
approx. $ 30,000
approx. $ 21,000
5
10 pts
Reuben works full-time and has racked up a $5,000 debt on his credit card, which is now maxed out. What is the next step Reuben should take?
Apply for a new credit card with a higher limit
Cut up the credit card and vow to never get in that much debt again
Destroy his credit card and put aside a set amount out of each pay cheque to pay off his debt
6
10 pts
What is your credit card limit?
Your ticket to the good life?
The amount a credit card company is willing to lend you.
The highest dollar amount you can be charged without being slapped with a fee.
All of the above.
7
10 pts
Buying on credit is almost always cheaper than paying cash?
True
False
8
10 pts
If you want to take advantage of agrace period on your credit card, you must pay your bill in full every month? ** Note: The Grace period is the period of time before you must make a repayment on your credit card. After this period, interest is charged on the balance owing.
True
False
9
10 pts
Perhaps the greatest disadvantage of using credit is the temptation to overspend?
True
False
10
10 pts
A debit card is different from a credit card because;-
money is immediately deducted from the balance of your savings account.
a debit card uses the bank's money
a debit card is another name for an entertainment or travel card.
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