Vocab
This fee results when you have spent more money than you have in your checking account.
What is an overdraft?
This exists when you look for information that confirms what you already believe.
What is confirmation bias?
Why should you want to have a credit card?
Necessary for Emergencies Making Hotel Reservations Renting A Car Develop A Credit History Convenience While Shopping Enjoy Goods and Services Now, Pay Later Take Advantage of Rewards
A plastic card that holds pre-approved credit which can be used for the purchase of items now and payment of them later.
What is a credit card?
True/False-it is good to be a co-signer on a credit card
false
What is sunk cost fallacy?
This is the current term for "keeping up with the Jones"
What is FOMO?
Why should you not want a credit card?
Credit costs money Its easy to overspend It it ties up future income It can destroy your credit rating
True/False Paying the minimum payment is the best way to pay for credit card debt
FALSE
What are some do's and dont's when having a credit card?
do's paying the amount charged to a credit card in full everymonth dont make late payments do pay credit card payments ontime dont only may the minimum payment due do keep track of all charges by keeping receipts dont go over the cards credit limit etc..
Assets that the bank can take possession of if a borrower doesn't pay back a loan.
What is collateral?
Making unplanned purchases.
What is impulse buying?
What are the four major credit cards?
Visa MasterCard Discover American Express
What can a credit card pay for?
virtually anything goods services
What are some advantages of using a credit card?
convenient useful for emergencies often required to hold a reservation purchase expensive items possibility of receiving bonuses, such as frequent flyer miles and cash rebates
The original amount of money borrowed.
What is the principal?
The tendency to regard losses as considerably more important than gains of comparable magnitude
What is loss aversion?
What are the 5 C's of credit?
character capacity capital collateral credit history
What type of loan is a credit card?
unsecured loan
What are some disadvantages of using a credit card?
paying interest if balance is kept on card additional fees may apply if card is not used properly tempting to overspend responsible for lost/stolen cards risk of identity theft
The interest rate charged over the course of a year.
What is APR? or Anual Percentage Rate.
The tendency to put more value on things you already own
What is endowment effect?
This interest rate is in effect when your payment is late.
What is the penalty APR?
When a cardholder only pays the minimum balance every month what will be charged against the balance?
What is interest?
What is the recommended percentage of your take-home pay that you should save?
What is 20%