Analysis of Credit Card Debt
Argosy University online
General Education Mathematics
Instructor: Carolyn Gorczynski
July 10, 2013
In 1946 the first bank card was introduced by a man name John Biggins from Brooklyn, NY. This card was called “Charge-it”. When the card was used for purchases the bill first when to the Biggins bank. The bank then gave the money back to the merchant and then received the payment from the customer. The only way to have a “Charge-it” card was you could only use the card locally and also had to have an account through Biggins Bank. Credit cards are good and can help you build credit for in the future if you want to get a loan for a house or car or other such items. However, they can be bad because people tend to spend too much with them and then get in way over their heads with it and wind up paying a bill that takes those years to pay off or heavy interest rates that come with it each time you miss a payment or you are late paying it.
With a credit card balance of 5,270.00 and an (APR) of 15.53% with no fees applied. If I was to take 5,270 x 15.53% that will give me 818.43 interest for the whole year. The maximum monthly payment would be 5,270.00 + 818.43 =6,088.43. To get this balance I took the balance + total interest = total balance. Next to get the minimum monthly payment you take 6,088.43/12 =508.00 which is the minimum monthly payment I would have to pay each month. The amount of interest which is 818.43 and the amount of less interest applied to reduce the principle which is 5,270.00. You would take the amount of interest 818.43 – 508.00 minimum payment = 310.43 which is the amount used to reduce the principle. Considering I had a credit card bill let’s say I had a balance of 705.50, my minimum monthly amount would be determined by my payments, purchases, past due balances and also any interest charged. The minimum credit card payment would 59.00 with an (APR) of 18%. What would be applied to...
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