Introduction to Credit
What does it mean to buy something on credit?
Credit is the ability to borrow money with the promise to repay it later.
How is a limit on a credit card?
Your limit is the total amount of money you are allowed to spend on your credit card.
Give an example of a purchase where you would use a loan.
An example of an purchase where you would use a loan would be a large purchase such as an auto loan, college tuition loan, or a mortagage.
What is the term for the money available in a bank account?
Balance
Founded in 1994 by Jeff Bezos, this online retailer revolutionized e-commerce, becoming the largest retailer in the world by market capitalization.
Amazon
Name two types of credit/debt.
Credit cards, loans, lines of credit.
What is credit utilization?
Credit utilization is the ratio of your credit card balance to your credit limit.
What’s the difference between credit card and installment credit?
Credit Card allows borrowing repeatedly up to a limit (e.g., credit cards), while installment credit has fixed payments (e.g., auto loans).
What is a fee called that you incur when you spend more money than you have in your checking account?
Overdraft Fee
This term refers to the money a business makes after subtracting expenses, taxes, and costs of goods sold from total revenue
Revenue
What will happen to your credit score if you apply for a new card?
Your credit score will go down
What does it mean is you max out your credit card?
You have reached your spending limits.
How much is the interest on a 5% loan for $1000
$50
What do you call a card linked to a checking account that allows purchases and withdrawals?
Debit Card
What is European Money called?
The Euro
What are three factors that influence your credit score?
Factors include payment history, amounts owed, length of credit history, types of credit used, and new credit.
What happens to your credit score when a credit inquiry occurs?
A credit inquiry is when someone checks on your credit score - your score will go down.
What is a scenario where you would use a credit line?
A scenario where you would use a credit line would be opening a business or renovating a house
What is it called when money is earned by keeping funds in a savings account?
Interest
This tech company, founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976, became one of the world's most valuable brands, known for its innovations in phones, laptops, and tablets.
Apple
How long does Bankruptcy last for?
7-10 years
What is the top credit score?
850
How does compounding interest work?
Interest compounds meaning that you have to pay interest on top of previously paid interest.
What does ATM stand for?
Automated Teller Machine
This former athletic entertainer owns beverage brands such as Teremana and Zoa - just don't call him Moana you jabroni