Credit & Loans
What is a credit card used for?
help buy things now and pay for them later
What is different about a savings account and a checking account?
savings accounts help you save money and earn interest, while checking accounts are used for spending money
How often should you check your bank account and compare it to your register?
every month
What happens when you leave money in a savings account for a long time?
earn interest, and your money grows
What should you do if the money in your bank account register doesn't match your bank statement?
check for mistakes or ask the bank for help
What is a credit report?
document that shows how well you have paid back money you borrowed
What can you do with an ATM or debit card?
take out money from your bank account or buy things with it
What happens if you use an ATM that isn’t your bank?
might have to pay a fee
Why is it important to save money for the future?
to be able to buy things you need later or handle emergencies
Why is it important to keep track of your credit history?
it helps lenders know if you are likely to pay back money you borrow
What do you need when you apply for a credit card?
your name, address, and information about your income
What is compound interest?
when you earn interest on both the money you save and the interest you already earned
What is credit utilization?
how much of your credit limit you are using
What do you do in a bank account register?
write down every time you put money in or take money out of the account
How does interest affect how much money you have to pay back on a loan?
it makes the loan cost more money over time
Why do people take out loans?
to borrow money for something they need or want, like a house or car
Why do people use a checking account?
to keep track of the money they spend every day
What do you need to do when you apply for a credit card?
show that you have a job and can pay back the money
What’s the difference between using an ATM card and a debit card?
debit card is for buying things, and an ATM card is for taking out cash
What happens if you pay your credit card bill on time?
it helps build a good credit history
What credit score do you need to get approved for a loan?
usually a score of 650 or higher
How does writing down everything you spend in a bank register help you?
it helps you know how much money you have left and avoid spending too much
What’s a good way to avoid getting into credit card debt?
only use the credit card for emergencies and always pay the full balance
Why are interest rates important when saving money or taking out a loan?
higher interest rates mean you earn more money in your savings or pay more for loans
What’s a good way to avoid spending more money than you have in your bank account?
keep track of your spending and always make sure you have enough money in your account