PFP L04

CGE17105
Personal Financial
Planning
L04-Credit Card &
Consumer Loans (Team C)
Team members: Wong Yuk Lun (Anthony) [54067826]
Wong Ka Yee (Connie) [54071262]
Lau Wan Ling (Sena) [54074669]
Chan Yee Lam (Agnes) [54055422]
Wong King Man (Ronald) [54070763]

1

Life Situation of Shelby
Single
21

years old
No dependents
Graduate & Engaged

2

Background of
Shelby
Shelby has been out of college for about a year and has continued to work at the pet store full time. She recently got engaged to Mark Lawrence. After the last year of saving, she now has an adequate emergency fund. However, in the last year, she and Mark have used credit cards to make many of their purchases. They used cards (they each have several) when they ran out of money near the end of each month.
3

Background of Shelby
(Cont’)

They also used credit to fund a vacation to the beach. Shelby justified the trip and many of her purchases because both of the cards she uses have rewards programs. Both Shelby and Mark almost always make their payments on time but have been unable to pay off more than the minimum balance every month, leaving them with credit card debt.
Shelby and Mark would like to get married soon and possibly even buy a condo, but are not sure how to finance

4

Financial Data of
Shelby
Monthly
Income
Living
Expenses
Personal property Savings
Student Loans
Credit card

$17,500
$12,100
$73,000
$50,000
$42,000
$46,000

5

Q1) Given her current situation, list some suggestions on how Shelby can reduce her credit card debt.
1. Negotiate with creditors

Call

creditors and let them know she is willing to pay the debt  negotiate for a lower interest rate for debt payment 6

Q1) Given her current situation, list some suggestions on how Shelby can reduce her credit card debt. (Cont’)

2. Pay off all the credit card debts do not only pay the minimum payment  higher interest rate will be charged only hold one credit card
 they each have several credit
7
cards

Q1) Given her current