My Credit Card Choice

                My credit card of choice was the Discover Open Road card. Because I travel and I am on the road so often, I was in need of a credit card that was really suitable to my needs. I did a lot of research on many different other types of credit cards, and the Discover Open Road explained everything in vivid detail, which made my choice easy. Many of the other cards that I researched presented very little information out unless one was to sign a contract for the card. This might mean that those credit cards may be trying to hide something. When I did compare other credit cards, I found that the Discover Open Road Card had the best rates, which is what ultimately helped me make my decision.

                When I travel, I usually stop off at a lot of gas stations and restaurants. Discover Open Road card gives 2% cashback when I spend money at said places. In addition, every check I spend automatically gets a cashback bonus. No other credit card offers the same benefits that the Discover Open Road card does.

                The best part about the Discover Open Road card was the APR rates. There is a 0% rate for the first 14 months, and then after that, it’s only around 11%-20% annual fee for the particular card. I found this to be very reasonable in comparison to other credit cards that I researched. Also, there is only a 3% balance transfer fee. This is significantly lower than any card, and ultimately helped me realize that the Discover Open Road card was the choice for me.

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JOHN THE THIRD AND HIS PEANUT BUTTER PARADISE

John the Third loves peanut butter. In fact, he likes it a little too much. John the Third spends over $40,000 a month to get his fix of peanut butter. His annual fee for his purchases of peanut butter totals over $440,000. His APR is 10%, because his credit card company charges an extra $40,000 a year in addition to the $400,000 he spends on actually buying his beloved peanut butter. And his interest never changes, because John the Third has a fixed rate. John the Third is very good at always making his payments, and he has never been charged a late fee. However, if he was late, he would be held responsible. There is no such thing as zero liability when using a credit card!

 In addition, for using his credit card, John the Third is offered a very beneficial rewards program. His credit card company offers him a trip to Peanut Butter Island for every $400,000 he spends. And since John the Third already spends $400,000 each year, he gets to go to Peanut Butter Island annually!

Now, John the Third wants to make a little extra cash on the side. He applied for a job at Skippy’s Peanut Butter Company. The company offers him an introductory period rate of pay. After all, Skippy’s isn’t going to dish out the big bucks for a new worker like John, right? In time, though, and with a little hard work, John the Third will eventually become CEO of Skippy’s Peanut Butter Company!

Now John the Third wants a house, made entirely of peanut butter! However, he does not have the sufficient funds to build a house made of peanut butter! So he goes out and gets a loan. He is charged an introductory rate during the initial stages of the loan. He also received a line of credit by his faithful bank, Peanut Butter Bank. He eventually built an entire house made of 100% creamy peanut butter! Although John the Third will have to deal with finance charges in the near future, for right now he is happy.

When John the Third is ever low on cash to buy his peanut butter, he simply goes to an ATM and gets a balance transfer. This is really helpful for John because it allows him to get real cash easy and quick. Now John will never be without his precious peanut butter!

Vocabulary List:

·            Annual Fee: Fee charged by a credit card company for the use of their credit card.                
·            Annual Percentage Rate (APR): Cost of borrowing money on an annual basis; takes into account the interest rate and other related fees on a loan.
·            Balance Transfer: A balance transfer is the transfer of (part of) the balance (either money or credit) in an account to another account, often held at another institution.·            Cash Advance: A cash advance is a service provided by most credit card and charge card issuers. The service allows cardholders to withdraw cash, either through an ATM or over the counter at a bank or other financial agency, up to a certain limit. For a credit card, this will be the credit limit (or some percentage of it).
·            Credit Line/Line of Credit: A line of credit is any credit source extended to a government, business or individual by a bank or other financial institution.
·            Finance Charges: In United States law, a finance charge is any fee representing the cost of credit, or the cost of borrowing.
·            Fixed Rate: An interest rate that does not change over time.
·            Introductory Period: The Introductory Period is used to determine if a new employee's performance successfully meets the expectations of the role and if continued employment is beneficial towards the company or employer.
·            Introductory Rate: An introductory rate is an interest rate charged to a customer during the initial stages of a loan.
·            Late Fee: A fee charges when a payment has missed due date.
·            Rewards Program: Rewards credit card comapines offer their clients for loyalty.
·            Zero Liability: Having no consequences for the use of credit.

Credit Card Worksheet

Q: Approximately how long will it take Jenny to reduce her balance by half?
A: It will take approximately 15 years to take Jenny to reduce her balance by half.
Q: What is the final amount Jenny will pay to settle her credit card bill?
A: The final amount Jenny will pay to settle her credit card bill is $9983.63
Q: How much total interest will Jenny end up paying?
A: Jenny will end up paying $7483.63.
Q: During which year will more of her monthly payment go to the principal than to the interest?
A: During Jenny's 45th year more of her monthly payment will go to the principal than the interest.
Q: When Jenny goes to her 25-year high school reunion how much money will she still owe on the charges she made during her senior year?
A: When Jenny goes to her 25-year high school reunion she will still owe $873.23.
Q:When Jenny has paid off her account, she will be 65 years old and will have spent about $10,000 in interest. What could she have done differently? Answer this question with at least 5 ideas in full sentence form.
A: She could have (1) not gotten herself into debt in the first place, (2) not paid only the minimum balance each month, (3) used the debt snowball method to get out of debt faster, (4) not have used a credit card while she was so young or (5) not have even used a credit card in the first place.