6.10 Credit Cards

1. Which type of credit card is paid off every month so has no interest to be paid, but comes with high fees?
2. Which type of credit cards are the most widely accepted?
3. Which type of credit cards are the most limited?

The billing cycle goes from May 1 to May 31. The balance at the start of the billing cycle is $450.21. The list of transactions on the card is below.

Find the average daily balance for the credit card during the month of May.

Compute the interest charged for the credit card based on the given average daily balance (ABD), annual interest rate, and number of days in the billing cycle.

1. ADB = $2,765.00, annual interest rate 13.99%, billing cycle of 30 days
2. ADB = $789.30, annual interest rate 17.99%, billing cycle of 31 days
3. ADB = $1,037.85, annual interest rate 11.99%, billing cycle of 28 days

Find the balance on the credit card with the given interest charge and balance before interest was charged. The cards were not paid off previously.

1. Balance before interest is $708.50, interest charge is $8.15
2. Balance before interest is $1,395.10, interest charge is $21.32

Kaylen’s credit card charges 16.9% annual interest. His current billing period is from November 1 to November 30. The balance on November 1 was $1,845.23. Use Kaylen’s following transactions to determine his balance due at the end of the billing cycle.

The FYA credit card company has the following minimum payment policy. For balances over $1,000, the minimum payment is 2.5% of the balance due plus fees, but not interest. For balances between $500.00 and $999.99, the minimum payment is $50.00. For balances $499.99 and under, the minimum payment is $25.00 or the balance due, whichever is smaller.

In the following, calculate the minimum payment due…