Sponsored Newspapers In Education Content
| DAY,
MONTH 00, 2015
3
USING CREDIT WISELY
Credit cards require a lot of responsibility. You should
never charge more than 20–30 percent of your credit
card’s limit. You are less likely to be able to pay the full
amount owed if the bill is too high. Additionally, charging
more than 30 percent of your limit can result in a lower
credit score and a higher annual percentage rate (APR).
Here is an example of using a credit card correctly:
Charge less than 20–30%
of your balance to your card
$50
PURCHASE
Pay off entire balance
each month
$50
PAYMENT
MADE
No accumulated interest!
It helps your credit score
to not carry a balance
$0
BALANCE
In this example, the user charged a small amount
to the card and paid the entire amount off by the
due date. Since the user is not carrying over a
balance, they will not be charged interest on their
purchases. Paying off the entire bill each month
will help maintain a good credit score.
$50 CHARGES
$75 CHARGES
$125 CHARGES
$100 CHARGES
In this example, the credit card user is charging
50 percent of their credit limit, which could result
in their credit score dropping and their APR
increasing. If the user makes a minimum payment
of $15 a month until the card is paid off, it will
take 43 months and the user will pay $136.90 in
interest charges!
That means instead of paying
just the money they charged to the card,
$500.00, they will actually pay $636.90.
$80 CHARGES
$70 CHARGES
$500 IN CHARGES
NOT USING CREDIT WISELY
When credit cards are used improperly, they can cost the user a lot of money.
$1000 limit
14% APR
$1000 limit
14% APR
USE YOUR CREDIT WISELY
