ChargeIt

1. Jim is in college and working part time. He desires to have extra cash to buy a new notebook computer before school starts but he is unable to work more. With no credit history, he decides to apply for a credit card. After being rejected a few times, he finally receives one and immediately runs out to buy a computer. He accepted a card with a 15% APR, Two Cycle Daily Balance, and 0% APR for 6 months. He is happy until he quits his job to return to school and cannot find employment in enough time to afford the payments.

Initially, was Jim wise in his reasoning behind getting a credit card?

Yes, he needed a computer and building a credit history is important too.

No, Jim should not get a credit card because he does not have a steady job.

2. Was the card Jim accepted a good choice?

Yes, it offered a higher APR but great introductory term.

No, the APR is much too high and Two Cycle Daily Balance should be avoided.

3. Kathy decides she is ready to build her credit. First she starts with by opening a checking account. Next she builds up her savings with a part-time job. When she has a good amount of savings, she decides to get a credit card. She finds one with good rewards and beings to use it as cash wherever she goes. She makes sure to pay it off each month. Kathy never misses a payment and is offered another card that she takes up. This card has a lower APR. She charges some items on this card and leaves a balance. She is able to pay both cards but struggles for a few months when her job gives her fewer hours.

Up to what point does Kathy demonstrate good credit skills?

Taking out her first card

Taking out her second card

4. Was taking out the second card a good decision?

Yes, it shows she can handle credit wisely.

No, it was too great of a risk.