Finance Charges on Credit Cards Even before you use a new credit card, what information is the institution that issued your card required by law to disclose? The method used to compute finance charges and estimated dollar amount of finance charges The rate of interest and estimated dollar amount of finance charges The rate of interest and method used to compute finance charges The interest rate on cash advances is generally the rate on purchases. The most common method that banks and retail credit card issuers use to compute finance charges is the average daily balance (ADB) method. You expect to actively use your card. Which variation of the ADB method will be least expensive for you? ADB excluding new purchases ADB including new purchases It doesn't matter Consider the following case: On March 1, Kevin's credit card has a balance of $9,002.00. According to the terms of the card's lending agreement, an interest rate of 12% per year is assessed and the monthly finance charges are calculated using the Average Daily Balance (ADB) including purchases method. During the month, Kevin expects to make the purchases listed below and will make a payment of $675.15 on March 23 , and has collected the following additional information: Use the following table to help Kevin estimate his monthly interest charge for March. One way by which Kevin can increase his finance charges, everything else remaining constant, is to: Make larger or more frequent payments. Buy a larger number of more expensive items using your card. Make fewer, less expensive purchases. Finance Charges on Credit Cards Even before you use a new credit card, what information is the institution that issued your card required by law to disclose? The method used to compute finance charges and estimated dollar amount of finance charges The rate of interest and estimated dollar amount of finance charges The rate of interest and method used to compute finance charges The interest rate on cash advances is generally the rate on purchases. The most common method that banks and retail credit card issuers use to compute finance charges is the average daily balance (ADB) method. You expect to actively use your card. Which variation of the ADB method will be least expensive for you? ADB excluding new purchases ADB including new purchases It doesn't matter Consider the following case: On March 1, Kevin's credit card has a balance of $9,002.00. According to the terms of the card's lending agreement, an interest rate of 12% per year is assessed and the monthly finance charges are calculated using the Average Daily Balance (ADB) including purchases method. During the month, Kevin expects to make the purchases listed below and will make a payment of $675.15 on March 23 , and has collected the following additional information: Use the following table to help Kevin estimate his monthly interest charge for March. One way by which Kevin can increase his finance charges, everything else remaining constant, is to: Make larger or more frequent payments. Buy a larger number of more expensive items using your card. Make fewer, less expensive purchases