SQQM1073 (A) BUSINESS MATHEMATICS

HSBC Platinum Credit Card [2]. Affin credit cards (Affin Duo+) [5]. CIMB Credit Card CashLife [1]. 1. 2. 3. CALCULATION EXAMPLE: WHAT IS CREDIT CARD LOAN? A credit card loan or credit card debt is money you borrow when you use your credit card. Credit cards allow us to buy things when we either don’t have cash or don’t want to use cash. People may also prefer to pay by credit card because it offers convenience, security, and easy tracking. When you buy something using your card, the issuer loans you the money to make the purchase. You will have to pay back the loan at a later date. After a ‘grace period, ’ you will also have to pay interest on that loan [3]. Credit card debt is a type of revolving debt. You can keep borrowing month after month as long as you repay enough that you never owe more than your credit limit. Credit card accounts can be used indefinitely, unlike instalment loan accounts that are closed once the balance is paid off [6]. EXAMPLES OF CREDIT CARD LOANS: With credit cards, the APR and the interest rate are often about the same and credit card fees like annual fees and late payment fees do not affect the APR. When you keep a balance on your card, your card issuer uses the APR to calculate how much interest to add to your balance. Many card issuers charge interest using your daily balance. This is the amount of money you owe at the end of each day To do so, the credit card company divides your APR by 360 or 365 to convert to a daily periodic rate. Suppose your APR is 20%, and you have a daily balance of $6,000 on your card for the month. Your card issuer assumes 365 days per year. How much interest will you incur today? To calculate this, find the daily periodic rate. Then, multiply that daily rate by your account balance: 20% / 365 = 0.0548% x $6,000 = $3.29. The interest you owe for that day is $3.29 [4}. It is related to the Topic 8 in our course which is the Annual Percentage Rate (APR). APR is the annualised interest rate applied to your account during a given billing cycle which is your carry balance in credit card. It is called the Nominal Annual Interest Rate or Simple Interest Rate. CREDIT CARD LOAN SQQM1073 BUSINESS MATH: GPROJECT (GROUP 5) SESSION 22/23 (A221) LECTURER: DR. MOHD SAIFUL ADLI BIN MOHAMAD [1] CIMB. (n.d.). CIMB CashLite | CIMB Credit Card CashLite. CIMB. Retrieved January 21, 2023, from https://www.cimb.com.my/en/personal/day-to-daybanking/cards/credit-card-services/cashlite.html [2] iMoney. (2023). 2023 HSBC Platinum Mastercard - Earn 8x Reward Points. iMoney. Retrieved January 21, 2023, from https://www.imoney.my/credit-card/hsbc/platinum-mastercard [3] Market Business News. (n.d.). Credit card loan - definition and meaning. Market Business News. Retrieved January 21, 2023, from https://marketbusinessnews.com/financial-glossary/credit-card-loan/ [4] Pritchard, J. (2021, October 27). What Is APR? The Balance. Retrieved January 21, 2023, from https://www.thebalancemoney.com/annual-percentage-rate-apr315533 [5] RinggitPlus. (n.d.). Best Affin Bank Credit Cards in Malaysia 2023 - Compare and Apply Online. RinggitPlus. Retrieved January 21, 2023, from https://ringgitplus.com/en/credit-card/Affin-Bank/ [6] Wrenn, S. (2022, March 8). What Is Credit Card Debt? The Balance. Retrieved January 21, 2023, from https://www.thebalancemoney.com/how-to-avoid-credit-card-debt4769014#toc-how-credit-card-debt-works REFERENCES: AMIRA ATIKAH BINTI AHMAD ZULKARNAIN (288057) WAN NUR AISYAH BINTI WAN ROMZI (288183) NOR HAFIZAH FARHANA BINTI NOR HIZAM (287743) SARAH AFIFAH BINTI AZEMAN (280611) SITI NABILA BINTI ABDUL HALIM (281283) PUTERI HANIS BINTI MOHD RUDUWAN (288573) 1. 2. 3. 4. 5. 6. GROUP 5: