Credit & Debit Cards
What is the difference between a credit and debit card?
A credit card lets you borrow money to pay later, while a debit card takes money directly from your bank account.
What is a savings account?
A bank account that earns interest and is used to store money for future needs.
What is compound interest?
Interest earned on your original amount and the interest already earned.
What is a budget?
A plan for how to spend and save your money.
What does “living within your means” mean?
Spending less than or equal to what you earn.
What happens if you only pay the minimum on a credit card?
You’ll be charged interest and it will take longer and cost more to pay off the balance.
Why do banks pay you interest on savings?
Because they use your deposits to make loans and investments.
What’s the difference between simple and compound interest?
Simple interest is earned only on the principal; compound interest also includes previously earned interest.
Name one fixed and one variable expense.
Fixed: Rent; Variable: Groceries or gas.
What does “pay yourself first” mean?
Saving a portion of your income before spending on anything else.
What does APR stand for, and what does it mean?
APR stands for Annual Percentage Rate; it’s the cost of borrowing money on a yearly basis.
What is an emergency fund?
Money set aside for unexpected expenses like car repairs or medical bills.
Why should you start saving early?
The earlier you save, the more time your money has to grow through compounding.
Why is it important to track your spending?
So you know where your money goes and can make better financial decisions.
Why should you avoid impulse buying?
It can lead to overspending and buying things you don’t need.
What’s one advantage of using a credit card wisely?
Helps build a good credit score or can earn rewards like cashback or points.
DOUBLE JEOPARDY
What happens if you withdraw money too often from a savings account?
Some banks may charge a fee or limit your number of withdrawals per month, because savings accounts are meant for saving, not frequent spending
If you invest $100 at 10% interest compounded annually, how much do you have after 2 years?
$121 — because 100 → 110 → 121 with compounding.
DOUBLE JEOPARDY
What is the 50/30/20 rule in budgeting?
Spend 50% on needs, 30% on wants, 20% on savings/debt.
What is one habit that builds financial independence over time?
Regular saving or investing, budgeting, avoiding debt, or building good credit.
What is a credit score and why is it important?
A number that shows how trustworthy you are with borrowing money — it affects your ability to get loans, rent apartments, purchase vehicles, etc.
Name two reasons to open a savings account.
To earn interest and keep money safe; to save for goals or emergencies.
What is the difference between a bank and a credit union?
Banks: For-profit, open to public, may have more branches and tech tools.
Credit Unions: Non-profit, member-focused, typically better interest rates.
Name a budgeting app or tool.
Examples: Mint, YNAB (You Need A Budget), EveryDollar, or a spreadsheet.
What does it mean to be “financially literate”?
It means understanding how money works — including earning, saving, budgeting, borrowing, and investing — so you can make smart financial decisions.