5. Credit card interest rates and other fees

Credit cards provide many advantages and conveniences. They also carry charges and fees that can cost more money than planned for or anticipated.

Credit Card Fees and Charges

Rinas credit card has a variable interest rate, within a defined range, that changes periodically. The rate that the financial institution that issued her card uses as a basis to determine the current interest rate is called the base rate. The interest rate that applies to the credit card is computed as the sum of the base rate plus a certain percentage.

According to the terms of her card, the interest rate is the base rate plus 6%

Further, the minimum interest rate is 10%, and the maximum interest rate is 16%.

	If the computed rate is less than or equal to 10%, shell be charged 10%.
	If the computed rate is greater than or equal to 16%, shell be charged 16%.
	If the computed rate is between 10% and 16%, shell be charged the computed rate.

Today, the base rate is 5%. What is Rinas interest rate today?

%

In addition to interest charges, under certain circumstances, Rina could be subject to any of the following other fees and charges:

	Late payment fees
	Over-the-limit charges
	Foreign transaction fees
	Balance transfer fees

For each of the following situations, choose the fee that most closely applies.

	Most credit card holders have a defined line of credit, which is the maximum amount the financial institution approved for Rina to owe at any time. Her line of credit is $20,000. She currently owes $35,000. Rina will likely be charged .
	Rinas credit card is issued in the country where she is a citizen. During a recent vacation to another continent, she used her credit card to pay for lodging, meals, and tourist attractions. Rina will likely be charged .
	Rina currently carries a balance on her Visa from month to month. Shes going to move her Visa balance to a MasterCard card that charges a lower interest rate. Rina will likely be charged .