Credit Card Comparison

 

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Credit Card Comparison
Planning 10
Mrs. Durand

Explain/define the following terms:

Credit –
the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.

Credit Card – 

a small plastic card issued by a bank, business, etc., allowing the holder to purchase goods or services on credit.

Annual Fee – 

Any fee that is charged on an annual (yearly) basis. One of the most common occurrences of an annual fee is the fee that is charged by some credit card companies to their credit card holders, simply for having the credit card.

Interest Rate – 

the proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Minimum Payment –
The smallest amount of a credit card bill that a consumer can pay, to remain in good standing with the credit card company. Making the monthly minimum payment on time is the least a consumer needs to do, to avoid late fees and to have a good repayment history on his credit report.

Grace Period –
The grace period is the time during which you are allowed to pay your credit card bill without having to pay interest. The Credit CARD Act of 2009 requires that if issuers have grace periods, they must last at least 21 days. The grace period usually applies only to new purchases.

Answer the following questions.

Why would a credit card company let you borrow money?

A Credit Card company lets people borrow money because they make a lot of money off the interest that the company gets from the customer that owns the credit card not paying off the whole credit card that month.

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What card do you prefer and why? Explain in multiple sentences your reasoning.

I prefer the first credit card, the Student CHOICE REWARDS MasterCard. I feel this credit card is the best for me because it has a lower interest rate then the other two cards. Also it does cover for travel insurance which is a huge plus. It does have a annual fee of $24.00, but I feel that the fee is worth all the perks and benefits that come with the card. Also when I am 19 I plan on being a student in a University and this card is directed for students which is a good benefit because it would be directed to my life style.

What card do you NOT prefer and why? Explain in multiple sentences your reasoning.

I do not prefer credit card #2, the TD Cash Back MasterCard. This credit acrd isn’t for me because it has no annual fee which is good. It also has a interest rate of 19.99% with is pretty good. This credit card is very classic though and I can find the same credit card with the same interest and rates, but with way more benefits and perks then the TD Cash Back MasterCard.

Freedom 18 Reflection

When I finish high school my plan is to go to University and better my education. During University I will live at my parents house. My parents wont make me pay rent until I have a full time job and I am out of school. By living with my parents for as long as I can I wont have to pay for any gas, phone, or cable bills which will save me a lot of money. To get to school I will use a car. I will drive a 2013 Toyota RAV4 LE AWD which is listed for $19,999. My parents said that they will help me out and pay for half of my first car so the price that I have to pay would be only $9999.5. I will have saved $3000 so I will pay that off of the car right away and take out a loan to pay for the rest of my car. over the span of 3 years I will fully pay off my car paying $222.2 each month. If I drive 10,000km each year I will pay about $70 each month for gas. My Mom wouldn’t make me buy my own groceries when I live at home, but I will go out and get some milk or eggs from the store for her if she asks. Since I do have school and sometimes it’s easier to just go out and get lunch. I will go out to eat about 3 times a week. Eating out will overall cost about $220 each month. I wont have to pay for any new furniture or maintenance because I’m still living with my parents. I will pay for all my computer hardware problems, and supplies I need. I already a computer but if it does brake then I would have to pay for it, which would cost around $80 since I have apple care. I don’t often go out shopping for clothes but when I do, I spend quite a bit. Each month I spend about $100 on clothes and shoes. On hair cuts, toiletries and make-up I will spend about $45 each month. I wont spend that much money on recreational activities but when I do want to rent a movie I will spend $5, which overall would add up to about $20 each month. My parents cover the cost of my education. In return they expect me to succeed in my schooling, and help out by getting as many academic scholarships as I can before going to University. Each month I will put $48 into my savings account so in the future if something unexpected does go wrong, I have that money in my savings to recoil on. After calculating my total monthly expenses from my total income I have a surplus of $713.5.

30 for 30 broke reflection

Watching 30 for 30 broke made me realize and learn about a whole other side to athletic financials, and what happens to athletes after they finish their professional careers. These professional athletes make the peak of there income normally in there mid to late twenties. Some of them come from living in poverty and go to getting millions of dollars from their contracts in a matter of weeks. Because of this early exposure to such excessive amounts of money they don’t have the experience in life to know that they need to plan and save their money for the future. In this time where NFL athletes contracts where excessively rising, America was going through a period where there were a lot of spenders but not savers. This reflected on the athletes spending money on the latest clothes, shoes, cars, and flashy houses. The athletes were not only competitive on the field but they were also competitive off the field, in the change rooms, and parking lots. This is were the term “Keeping up with the Joneses” came from. Athletes spent extravagant amounts of money on their wants. This started to become a competition. Not everyone on the team was a million air but everyone wanted to look like one so they would spend as much as a millionaire, which would put them in debt. These athletes were spending so much money they didn’t know how to stop their spending habits once their career was over. Since some of these athletes came from poor backgrounds people started to rely on them for money and because of their relationships with these people it was hard for the athletes to say no. They felt guilty because they thought it was their responsibility to help the people out that helped them. Since these players were paying multiple mortgages, when their careers did end they couldn’t afford to pay the other mortgages. They didn’t know how to tell there friends or loved ones that they couldn’t provide financial help anymore, which greatly effected them in the future. Since these athletes were so young and didn’t think about their life after they did retire, or assumed they would be playing for a certain number of years. When they did get injured or the team cut their contract, because they weren’t saving and planning they didn’t have money to recoil on. This decision not to plan and save was the worst decision some of these pro athletes made, and effected them many years after they stop gaining such a huge income. If I was a financial planner I would make sure these athletes were saving money for the future and I would give them a budget that would keep their spending habits to a minimum. I would also educate my client about planning for the future after his/her sports career is over, and making sure she/he finds another skill to pursue once they end their athletic career. The money management lessons the average person can take away from this is always save money, know what you have and when you can afford to splurge on your wants while still being able to afford your needs, and have a plan for the future.