# Hall Middle School Math Pages

## Credit Cards & Decision Making

### Introduction

We all know that paying cash is the best way to purchase an item instead of paying interest on a credit card. However, we do not always have the money when we need or want a particular item. In this activity you will learn how credit cards work when they are used to make purchases. Credit cards are convenient because they are easier to carry instead of a lot of cash. They can also be used to borrow money when you do not have enough to pay for the item up front. However, credit cards can be deceiving if you do not understand how they work. Some people see credit cards as "free money" until they receive the monthly bill. The credit card company adds a finance charge to the unpaid balance. This finance charge is the interest you pay the company for borrowing their money. Your job is to figure out which credit card would offer you the best terms. You will need to be familiar with the following terms: annual fee, annual percentage rate (APR), and minimum monthly payment.

You are planning to purchase a new computer! To do this you will need to research online the type of computer you plan to purchase and come up with a cost.You will be making this purchase on a credit card, but you need to research first to find out what credit card will offer you the best terms. This card will not be used for any other purchases, and you will not be paying the purchase off right away, but will be financing it over a period of at least six months. You need to choose three credit cards, research each one, and complete a data sheet to determine which card will save you the most money. Then you will prepare a spreadsheet report for each credit card, answer a set of questions and submit them all together as a packet.

### The Process

1. First, you need to search creditcards.com and find 3 credit cards that you would use to make your purchase.
2. After you have found the credit cards, you need to research each card for the following information: annual fee, regular annual percentage rate (APR), introductory APR, introductory APR period, & credit needed to get the card.
3. Enter the information you found into the first table on the credit card data entry form.