Credit card math

Considering the crisis taking place within U.S. financial institutions, it's a good reminder of how we MUST teach our kids how to work out the math with credit cards, mortgages, and any type of loans.

Murray Bourne from squareCircleZ has taken this matter to heart and has written a good lesson about math that goes into taking a loan. He's also analyzed several misleading credit card ads and figured out the TRUE interest rate (which you find out after reading the fine print).

First go here:

Credit Cards - a simplified discussion on how banks make money on credit cards. This is a must read for all people (young or old) who even consider taking a credit.

Then check these posts and warn your youngsters:

Misleading Credit Card Advertising. This ad advertises "a attractive interest rate of 5% p.a." (p.a. means per annum or yearly interest rate), but has a "small" administration fee of 6%.

And then check another misleading credit card ad which advertises a 0% p.a.*. Notice it has an asterisk... and the info in the asterisk can lead up to 24% annual interest!