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Credit Cards To The Max A case study in making good credit card decisions

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Credit Cards To The Max A case study in making good credit card decisions

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!

 

Here is your current situation:

 

Credit Cad Debt:

  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

 

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?

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