Mini-Case A: (6.5 marks) Maya, a 22-year-old university student, has a credit score of 640, which is considered fair. She wants to improve her score to qualify for a lower interest rate on a car loan when she graduates next year. Here is an overview of her financial situation: • Maya has had a Mastercard with a $1,000 limit since she was 18 years old, which she maxes out each month. • She only makes the $50 minimum payment leaving her with just $50 in available credit for new purchases each month. • She missed two credit card payments in the past year, but it is only because she forgot to pay. • Since her Mastercard is always at its credit limit, Maya decided to apply for a second credit card to use in emergencies. She is currently awaiting a response from Visa. • She has a student loan of $10,000 with the Royal Bank of Canada (RBC) but is not required to start reimbursing until after graduation. • She earns a gross monthly part-time salary of $1,000 and spends the entire net monthly pay of $800 as follows: $500 to repay her parents for the car they purchased for her, $100 on her cellphone bill, $50 as a minimum monthly payment on her Mastercard, and $150 on hair, manicures, and pedicures. • She lives with her parents but is looking to move into an apartment with two girlfriends once she graduates in April 2026 and secures a full-time job.b) Since Maya missed two minimum payments on her credit card and keeps a running monthly balance, is Maya entitled to the 21-day grace period on any new purchases? (.5 marks for .25 marks each) Yes or No Highlight and Underline the correct response. Explain: ____________________________________________________________________________________________________________________________________________________________ c) Based on her current financial situation, provide three strategies Maya must implement over the next 12 months to improve her credit score. (1.5 marks for .5 marks each) 1______________________________________________________________ 2______________________________________________________________ 3______________________________________________________________ d) Explain why improving her credit score is important. (.5 marks) Explain: ____________________________________________________________________________________________________________________________________________________________ e) Explain why checking her credit report is important. (.5 marks) Explain: ______________________________________________________________________________________________________________________________________________ f) If Maya reviews her credit report with one of the credit bureaus (either Equifax or Transunion), will this impact her credit score? Explain. (.5 marks for .25 marks each) Yes or No Highlight and Underline the correct response. Explain: __________________________________________________________________________________________________________________________________________________________ g) Explain Minimum Payment on a credit card. (.5 marks) Explain: ____________________________________________________________________________________________________________________________________________________________ h) Maya is unsure how credit card interest works and is just learning about the important concept of compounding interest. Highlight and Underline the correct response. (.5 marks) Compounding interest frequency on major credit cards: Annually; Quarterly; Monthly; Weekly; or Daily i) After graduating in April 2026 and starting full-time work, Maya plans to cancel her student credit card, believing its $1,000 limit is too low. She feels confident that she will qualify for a higher-limit card with better rewards. Is it a good idea to cancel her student credit card(s) after university? (.5 marks) Explain: ____________________________________________________________________________________________________________________________________________________________ j) Maya is still waiting for the approval of her second credit card that she applied for. In the meantime, while she was shopping in the Hudson’s Bay store, she was approached for a great deal of ”15% off her first-day purchase” if she signed up for the Hudson's Bay Credit Card. She wanted the 15% savings, so she filled out the retail credit card application and applied on the spot. Explain if this was a good idea. (.5 marks) Explain: ______________________________________________________________________________________________________________________________________________