ONLINE FYE105 Financial Literacy: Planning for Life

If you put 5% of your income in a savings account, you're earning more per $100 than you'll use for an emergency that you would have placed on a credit card. 

Credit card interest . . . year interest, daily interest . . . what does it all mean

Credit card agreements are full of jargon. These are the things to remember:

1.  Find out your yearly interest rate
2.  Figure out your daily interest rate.  This requires a bit of math.  My interest on my credit card for the year is 15%.  Divide 15 by 365 and this will give you a ballpark figure for daily interest. In this example it would be .041%.  Doesn't sound bad huh?
3. If you only make the minimum payment on your credit card, you will pay a huge amount in interest. 

If I save $100 per month (5% of $2000 monthly income)

In six months, I'll have $600.

New brakes cost $450.

If I put $450 on a credit card with 11.99% interest, paying $100 per month,

• Principal payment: $452
• Interest: $16

I'd repay $468 for the $450 brake job.

For the same $100 per month against a $450 expense

 +$150  |   -$18

savings       |   credit card

Up $150 versus down $18