1. ELISSA VERT 3 RD HOUR 02/25/15 Credit Cards – The Real Cost

2. Vocabulary Credit: Confidence in a purchaser's ability and intention to pay, displayed by entrusting the buyer with goods or services without immediate payment. Debtor: Is a person who is in debt or under financial obligation to another. Creditor: Is a person or firm to whom money is due. Asset: Is a single item of ownership having exchange value. Earning Power: A business's ability to generate profit from conducting its operations. Credit Rating: Is an estimate of the ability of a person or organization to fulfill their financial commitments, based on previous dealings.

3. Vocabulary (Continued) Credit Reporting Agency: This term refers to businesses that maintain historical information pertaining to credit experience on individuals or businesses. The data is collected from various sources, most commonly firms extending credit such as credit card companies, banks and credit unions. They also collect information from public records, such as bankruptcies. FICO Score: Are credit scores most lenders use to determine your credit risk. You have three FICO scores, one for each of the three credit bureaus - Experian, TransUnion, and Equifax. Installment Plan: A credit system by which payment for merchandise is made in in stallments over a fixed period of time.

4. Vocabulary (Continued) Down Payment: A type of payment made in cash during the onset of the purchase of an expensive good/service. The payment typically represents only a percentage of the full purchase price; in some cases it is not refundable if the deal falls through. Interest: Is money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt. Finance Charges: A finance charge is any fee representing the cost of credit, or the cost of borrowing. It is interest accrued on, and fees charged for, some forms of credit. It includes not only interest but other charges as well, such as financial transaction fees.

5. Living room Set The couch I am going to purchase is the Darcy Cobblestone Sectional for $678.00 from Art Van. I thought about purchasing this set, but as a single couch and loveseat, plus a brand new HD TV, but that set is $1,099.00. This sectional is upholstered with micro suede for durability. The cushion cores are constructed of low melt fiber wrapped over high quality foam.

6. Living Room Set – Cost Analysis Couch set for $678 plus tax of $40.68. Which equals to a total of $718.68. Saving Up Method If I paid $300 a month, then it would take me 2.4 months to pay it off. $718.68/300=2.39 (2.4) months Get It Now Method I have a credit card with 11% interest and no other fees if I pay it on time every month. I can pay $300 per month which is more than the minimum amount due. According to the Bankrate Calculator, it would take 3 months to pay it off. I would also pay $11.36 in interest $300*3= $900 Total $900-678= $222 Finance Charges

7. Home Entertainment System I am purchasing a Sony Smart TV for $599.99 plus tax, from BestBuy, which would be in total, $636 I am also purchasing a Yamaha Sound System, from BestBuy, for 149.99 plus tax which would be in total, $159. The total for both of these together would be $749.98 + tax of $45. This would be a complete total of $794.97

8. Home Entertainment System – Cost Analysis Entertainment Set (TV and sound system) all for a total of $749.98 plus tax of $45 which comes to a total of $794.97. Saving Up Method If I paid $200 a month then it would take me 4 months to pay it off. 794.97/200=3.97 (4) months Get It Now Method I have a credit card with 11% interest and no other fees if I pay it on time every month. I can pay $200 per month which is more than the minimum payment. According to the BankRate Calculator, it would take me 5 months to pay it off and I would pay $18.61 in interest. $200*5= $1,000 Total $1,000-$749.98= $250.02 Finance Charges

9. Large Kitchen Appliances I will be purchasing a regridgerator from Home Depot for $949 plus tax of $56.94, which would be a total of $1.005.94. I am also purchasing an oven from Home Depot for $548 plus tax of $32.88, which would be a total of $580.88. Lastly. I am purchasing a microwave from Home Depot for $69.96 plus tax of $4.19, which would be a total of $74.15. The total for all of these appliances would be $1,566.96 plus taxes of $61.13 would be a grand total of $1.628.09.

10. Large Kitchen Appliances – Cost Analysis Large appliances all for $1.566.96 plus tax of $61.13 which comes to a total of $1,628.09. Saving Up Method If I paid $300 a month then it would take me 5.4 months to pay them off. $1.628.09/$300=5.4 months Get It Now Method I have a credit card with 11% interest and no other fees if I pay it on time every month. I can pay $300 per month which is more than the minimum payment. According to the BankRate Calculator it would take me 6 months to pay them off, and I would pay $49.87 in interest. $300*6= $1.800 Total $1,800-$1,628.09= $171.91 Finance Charges

11. My Education – Cost Analysis My total education cost me $10,713.75. Saving Up Method If I paid $500 a month then if would take me 21.4 months to pay off the cost of my degree. $10,713.75/$500=21.4 months Pay For It Now Method I have a credit card with 11% and no other fees if I pay it on time every month. I can pay $500 per month which is more than the minimum payment. According to the BankRate Calculator it would take me 24 months to pay off the cost of my degree, and I would pay $1,268.80 in interest. $500*24= $12,000 Total $12,000/$10,713.75= $1.12 Finance Charges

12. Analysis’ Living room set: Based on the cost analysis results I plan to use the saving up method because I know that I am responsible enough to save up my money and only by what I need for the time being until it is all paid for. Home Entertainment System: Based on the cost analysis results I plan to use the saving up method because it’s not anything that I need right now. I know that I will be able to pay the TV and sound system off steadily. Large Kitchens Appliances: Based on the cost analysis results I plan on using the get it now method, because I know that I have the responsibility to make my monthly payments on time and in the amount that I promised. My Education: Based on the cost analysis results I plan to pay off the student loans in monthly payments, because I know that it would take too long to save up to pay them off. I also know that I would be able to be responsible enough to pay the monthly payments on time.