CREDIT CARD RESEARCH
1. Credit card name (Visa MasterCard, Discover, Kohl's, etc.)
1. Credit card name (Visa MasterCard, Discover, Kohl's, etc.)
- Citibank Mastercard
2. Type of account
- Mastercard (no late fees or a penalty rate)
- Simplicity Credit Card
3. Company name, address, phone
- The name of the company for my first option is Citibank, a New York-based commercial bank and financial services operation
- Nearest address:
- 285 S Lake Avenue
Pasadena, CA
(626) 219-7037
4. Website
5. Locations where the card is accepted
- any commercial store, restaurant, airport, and other service center with a mastercard logo (available at millions of locations worldwide)
6. Annual fee (if any)
- No annual fee
7 Payment grace period
- 23 days
8. Annual Percentage Rate (APR)
- This amount shall depend on my individual credit worthiness, and will also reflect to the market based on the Prime Rate
- options: 12.99%, 15.99%, 18.99%, 20.99%, 22.99% (average = 18.39%)
9. Finance charge calculation method
- Single-payment credit structure, wherein a grace period is given to the cardholder of no interest and in this grace period, items and services are paid for in a single payment after the purchase. If the purchase is not settled after the grace period has reached its full capacity, then an interest rate is applied to the balance and thus its value increases, costing the consumer more money in the long-run.
10. Credit limit
- As low as $500 (determined after application is submitted; based on financial status and on the three c’s criteria - capital, character, capacity)
11. Minimum payment
- 1/36 of total balance due by specified due date
12. Other fees: (late payment or others that you find)
- Transaction fees
- balance transfer: $5/3% of transfer (greater of the two chosen)
- cash advance: $10/5% of the amount of each cash advance (greater of the two chosen)
- foreign purchase transaction: 3% of each purchase according to US dollar value
- Penalty fees
- returned payment: up to $35
- Minimum interest charge: no less than 50 cents (charged on cash advances and balance transfers of transaction date - due date is at least 23 after the close of each billing cycle)
13. Other features: (??? - you tell me)
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| This is the logo of Citibank, an up and coming bank majoring in customer service; in this homely environment, a consumer applying for a credit card is more heavily judged by his or her status as an abiding financial guru |
1. Credit card name (Visa MasterCard, Discover, Kohl's, etc.)
- Bank of America Visa
2. Type of account
- Bank Americard Cash Rewards Credit Card (1% cash back on groceries, 2% at grocery stores, and 3% on gas for the first $1500 in combined grocery store
3. Company name, address, phone
- Bank of America
- Nearest address:
- 1687 E Colorado Boulevard
Pasadena, CA
(626) 578-5181
4. Website
5. Locations where the card is accepted
- The card is accepted at millions of merchant stands in over 150 countries worldwide, these stands all exhibiting the Visa logo verifying they do indeed accept this form of credit card
6. Annual fee (if any)
- No annual fee
7 Payment grace period
- 25 days
8. Annual Percentage Rate (APR)
- 12.99-22.99% (for purchases and balance transfers) varying on market behavior
9. Finance charge calculation method
- This card follows the philosophy of single-payment credit, where a purchase is transacted after its dealing with a single payment being due at the end of a grace period. If the grace period due date is met without any payment, then an interest rate is applied to the balance due.
10. Credit limit
- $5000 (limit is adjusted if it is surpassed and cannot be controlled according to the willingness of the consumer)
11. Minimum payment
- 1/36 of balance due
12. Other fees: (late payment or others that you find)
- Balance transfer fee: 3% of each transaction (minimum of $10)
- Transaction fees:
- purchases (of wire transfers from a non-financial institution): either $10 or 5% of the amount of each transaction (greater amount chosen)
- balance transfers: either $10 or 3% of the amount of each transaction (greater amount chosen)
- cash advances (direct deposit and check cash advances): either $10 or 3% of the amount of each transaction (greater amount chosen)
- (ATM, over-the-counter, same-day online and cash equivalent cash advances): either $10 or 5% of the amount of each transaction (greater amount chosen)
- (overdraft protection cash advances, if enrolled): $10for each transaction - not assessed if checking account overdrawn by less than $10
- foreign transactions: 3% of the U.S. Dollar amount of each transaction made in a foreign currency or made in U.S. Dollars that is processed outside the United States
- Penalty fees
- late payment: up to $35
- returned payment: up to $25
13. Other features: (??? - you tell me)
- 0% introductory rate for 12 billing cycles (over the course of 60 days)
This is the logo of Bank of America, a multicellular bank that has grown into a sort of weed, gulping smaller banks and expanding on capitalism; such a bank has no many funds so as to be more lineant in forgiving expired grace periods
1. Credit card name (Visa MasterCard, Discover, Kohl's, etc.)
- Nordstrom Visa
2. Type of account
- Nordstrom Visa Signature Credit Card
3. Company name, address, phone
- Nearest department store:
- Hastings Village, 3363 E
Foothill Boulevard
Pasadena, CA
(626) 264-9044
4. Website
5. Locations where the card is accepted
- Where Visa cards are accepted (any place holding a Visa logo at its ‘cash register’)
- Card-holder eligible to get special access to certain events and hotels associated with Visa Signature
6. Annual fee (if any)
- No annual fee
7 Payment grace period
8. Annual Percentage Rate (APR) - based on Tier I qualification
- 10.90% for Nordstrom purchases (shall vary with the market according to the Prime Rate - printed on temporary card)
- 14.90% for non-Nordstrom purchases and cash advances (shall vary based on the market and the Prime Rate is use)
- (penalty): 27.90%, varying according to the market and the Prime Rate; applied to account if minimum payment is not received within 60 days of due date
9. Finance charge calculation method
- This card is based on revolving credit, wherein many items can be bought as long at the total amount does not go over the assigned card limit, with repayment being made at regular time intervals for any amount at or above the minimum ‘down payment’ required - this amount showing willingness to pay and the capacity to do so. The rest of the balance due is met with an interest tagged onto its value.
- The cardholder in question is placed in one of 4 tiers, with each being given a slightly higher APR, as well as a slightly higher interest rate, than the last. The tiers group people based on their financial health, with the first Tier being the most ideal and so reserved for those who get Es on the criteria encompassed by capital, capacity, and character
- Interest rate for Tier I applicant: 10.90%
10. Credit limit
- No pre-standing credit limit; Nordstrom shall analyze spending patterns and financial status of card-holder periodically to formulate a limit as needed
11. Minimum payment
- The greatest of (a) $35 (b) 5% of my new balance rounded to next higher whole dollar amount (c) the sum of all interest charges and fees inflicted during the current billing cycle plus 1% of my new balance, rounded to next higher whole dollar amount
12. Other fees: (late payment or others that you find)
- Transaction fees
- cash advance: $5/3% of each cash advance (greater amount chosen)
- Penalty fees
- late payment: up to $35
- returned payment: $25
- Minimum interest charge: the charge will be no less than 50 cents (rate charged on cash advances on the date of transaction - due date is at least 25 days after the close of each billing cycle)
13. Other features: (??? - you tell me)
- I shall earn 1 point per net dollar spent outside Nordstrom (anywhere Visa cards are accepted) - points apply to in-store discounts and other sorts of lucrative rewards
- Offer: earn $20 Note when you spend $100 with your Nordstrom card on the day you apply
- If new balance is less than revolving credit line, the current due each month is the greatest of (a) $35 (b) 10% of new balance, rounded to next whole dollar (c) sum of all interest charges and fees applied during the current billing cycle plus 1% of new balance - rounded to next whole dollar
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| Nordstrom is a luxury department store specializing in all types of apparel; the clothing here can be quite expensive and so gaining points from credit card with the store may not be quite a strong benefit from having one |
1. Which credit card has the highest annual percentage rate and how much is it?
- The credit cards being able to yield the highest percentage rate were those of Bank of America and Citibank, both of these credit bureaus reaching a rate of 22.99% for most day to day purchases. These percentages of course do depend on the market and the Prime Rate, a rate that the company decides on periodically based on the country’s financial state.
2. What method is used to calculate the monthly finance charge for the first major credit card?
- The first major credit card I went with was one from the group Citibank, with its only financial charge being calculated as all forms of single-payment credit are calculated: a single payment is required after a purchase, with no interest rate being applied. The details of this particular situation are outlined according to the details aforementioned, with a 23 day grace period being allotted. Of course though, an APR of 18.39% is applied to the amount that must be encompassed by the customer, him or her having to thus pay more for the item bought with the credit card in the long-run than if he or she had bought the item upfront in cash.
3. When does the finance charge begin to accrue on the credit from the local department store?
- The finance charge begins to accrue after the grace period is surpassed, this being 25 days after a purchase is carried through.
4. Do any of the cards have annual fees? If so, which one (s) and how much is the fee?
- None of the credit cards I was interested in had annual fees (in this way, they look more desirable than if they did).
5. If there a transaction fee on any card? If so, how much is it?
- Transaction fees for the Citibank card
- balance transfer: $5/3% of transfer (greater of the two chosen)
- cash advance: $10/5% of the amount of each cash advance (greater of the two chosen)
- foreign purchase transaction: 3% of each purchase according to US dollar value
- Transaction fees for the Bank of America card
- purchases (of wire transfers from a non-financial institution): either $10 or 5% of the amount of each transaction (greater amount chosen)
- balance transfers: either $10 or 3% of the amount of each transaction (greater amount chosen)
- cash advances (direct deposit and check cash advances): either $10 or 3% of the amount of each transaction (greater amount chosen)
- (ATM, over-the-counter, same-day online and cash equivalent cash advances): either $10 or 5% of the amount of each transaction (greater amount chosen)
- (overdraft protection cash advances, if enrolled): $10for each transaction - not assessed if checking account overdrawn by less than $10
- foreign transactions: 3% of the U.S. Dollar amount of each transaction made in a foreign currency or made in U.S. Dollars that is processed outside the United States
- Transaction fees for the Nordstrom card
- cash advance: $5/3% of each cash advance (greater amount chosen)
6. Is there a minimum finance charge on either of the major credit cards? If so, how much is it?
- For both credit cards, there was minimum finance charge of 1/36 of the total balance due in each billing cycle
7. Does the first major credit card charge a fee for late payments? If so, how much is it?
- The first credit card from Citibank does not actually charge a late fee. However, it a balance is not paid on time, an interest rate is charged and the credit card limit may be reduced since the criteria of character has been violated.
8. What is the grace period on the credit from the local department store?
- The grace period for the Nordstrom card is 25 days in length.
9. Rafael wants to buy a new CD player that costs $450. According to his budget, he can afford payments up to $62.00 per month. Which of the three credit cards you’ve found would you recommend that Rafael use to purchase the CD player? Explain why.
- Given that Rafael may not know when he will be paying off this purchase in full after using a credit card for its transaction, he should probably go with a card that has a low annual percentage rate so that more of his payments to the credit card bureau of his choosing shall be used to pay off the item he bought rather than benefit the bureau itself. Since him buying a CD player is a one-time purchase, the first two credit cards I analyzed would most do for the situation, given how simply their setup is. In this sense, he would be required to pay a minimum amount per month of about $12.50, way below what he is willing to pay per month - $62 -, since $12.50 calculates to be 1/36 of the balance due at $450 - the tag price of the CD player. Since the lowest possible APR for both credit cards in 12.99%, either one would work. However, since the first one has no benefits tied to its application, I suggest he use a new Bank of America credit card, as its first 12 billing cycles has an APR of 0%. In this way, Rafael would be more effectively using his money to pay off his debts and thus accrue a strong credit history.
10. In general, reflect on how making responsible financial decisions regarding borrowing and credit (debt) can lead to financial well-being over a lifetime?
- Using a credit has major pro in its methodology: it allows its users the ability to buy more things in a shorter amount of time, enabling them to not directly lose hard-earned cash stocked away in a savings account. In this way, a person’s account can be allowed to grow and gain interest over time, eventually allowing for its rewards to be enjoyed by its owner or owners. However, there is one necessary step in order for such a smooth process to be met: credit card users must make responsible financial decisions with their newly-gained power. Consumers must make certain the credit card they have fits their needs and lifestyles, offering them a reliable APR so that the purchases they make are easily paid off in the long-run. If the consumer both purchases with a credit and shows that credit card that he or she has capital with which to pay the purchase off, has capacity so that future purchases can be paid off, and has character wherein his or her financial state allows for the purchase to be paid off, then a strong credit history is built up, and more rewards are enjoyed by the consumer, one these rewards being a higher credit limit or lowered interest rates and annual percentage rates. Such rewards only means more money in one’s pockets and a better livelihood teeming with a good storage of money stocked away and enough buying power to live life to its fullest.
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