With each credit card comes a credit agreement (or

Chapter 11, Problem 886

(choose chapter or problem)

With each credit card comes a credit agreement (or security agreement) the cardholder must sign. Select two members of your group who have a major credit card (MasterCard, Visa, Discover, or American Express). If possible, one of the credit cards should be a gold or platinum card. Obtain a copy of the credit agreement signed by each cardholder and answer questions (a)(p). a) What are the cardholders responsibilities? b) What is the cardholders maximum line of credit? c) What restrictions apply to the use of the credit card? d) How many days after the billing date does the cardholder have to make a payment without being charged interest? e) What is the minimum monthly payment required, and how is it determined? f ) What is the interest rate charged on purchases? g) How does the bank determine when to start charging interest on purchases? h) Is there an annual fee for the credit card? If so, what is it? i) What late charge applies if payments are not made on time? j) What information is given on the monthly statement? k) How is the finance charge computed? l) What other fees, if any, may the bank charge you? m) If the card is lost, what is the responsibility of the cardholder? n) If the card is lost, what is the liability of the cardholder? o) What are the advantages of a gold or platinum card over a regular card? p) In your opinion, which of the two cards is more desirable? Explain.

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