Credit Cards
Name three advantages of using a credit card.
Cash back rewards, security, build credit etc...
(answers may vary)
What is a debit card?
A card that takes money directly out of your account?
What are the three credit bureaus?
TransUnion, Equifax, and Experian.
FICO Score
What is a credit report?
A profile of your financial history
How old do you have to be to get a credit card?
21 years old
What account is a debit card typically used for?
Checking Account
How do lenders determine your credit risk?
By looking at your credit score
What is an excellent FICO score?
750 or higher
What is a prepaid card?
A card that you put money on that is not connected to an account, and money comes directly off the card
Does a credit card take money out of your account or is it a loan from a credit bureau?
Loan from credit bureau.
Do debit cards charge interest on purchases?
NO
What is a credit bureau?
A reporting agency that collects information on consumer credit
If you don't pay your bills on time, will your credit score drop?
Yes. It will show you have money problems and may be a risk to loan to
How often can you get a free credit report?
Once a year
What should you consider when getting a credit card?
Fees + Interest Rates
Do debit cards help you build credit?
No
What information do credit bureaus collect?
Payment history
Amount of money owed
Length of credit history
Amount of recently opened accounts
If I pay my payments in full and on time, does my credit score go up or down?
Up because it shows you are responsible.
A banking service that allows you to link your checking account to your credit card
Protecting you from overdraft fees
Explain credit limit.
Credit limit is the maximum amount of money that can be spent on that card
Is a debit card the same thing as a prepaid card?
No, debit cards are connected to an account while prepaid cards are cards you put money on
What information do credit card bureaus keep?
Credit History
Amount of money owed
Length of Credit History etc
What is the "20-10" rule?
Limit card debt to less than 20% of income
Less than 10% of income goes to paying off debt
Name one type of prepaid card
Gift Card