Your friend wants to start building her credit. She has heard that owning a credit card is a good way to start building credit. However, she is concerned that she may not be able to control her spending impulses if she had a credit card. What are some ways in which you could advise your friend? Give at least three recommendations.
With this calculator, you can estimate how much you will pay on credit card purchases if you only make the minimum payments. The average interest rate is currently 22%. Most often, credit card banks calculate the minimum payment amount as 2%of your current balance (for balances of $1,000). Using those figures, determine how much you would pay for each of the following credit card purchases, if you only paid the minimum amount. (Note that the figure it gives you is just interest. So, also include the purchase amount. For example, if you buy something for $1,000 and the total interest paid is $500, the total amount you pay would be $1,500.
Buy something for $1,000
Buy something for $5,000
Buy something for $10,000
(Hint: Yes, these numbers get very big.)
Below are some common things people do in life. For each, determine if it would likely raise their credit score, likely lower their credit score, or have no impact on their credit score. Some are tricky and may not be fully clear. Make sure to explain your reasoning with a short sentence or two.
Accidentally forget to make a payment on their credit card.
Do not pay a medical bill for five months.
Make rent payments on time for a year.
Make payments on their credit card on time for a year.
Increase the limit on one of their credit cars.
Move from one apartment to another.
Lower their credit utilization.
Take out a car loan.
Loan $10,000 to a family member.
In this week, we targeted one learning goal for the course - accessing wellness tools. Write a few sentences as to how this week’s material has helped you progress toward meeting this learning objective. The learning goal objective is as follows:
Accessing wellness tools: Students develop tools for improving their physical, social, and/or mental/emotional health and overall college experience.
