Info
List 1 disadvantage of credit cards.
Way too tempting; carrying a balance; getting out of debt;
If paid in full during this time, you won't have to pay a finance charge on purchases for that bill; often about 25 days.
Grace period
What is one way you can save money when paying on your credit card?
You will get this if you don't pay your bill by the due date.
Charged a late fee, can be up to $35.
A credit card company sets how much you can charge on your card; based on credit score.
Your credit limit
What is the difference between credit and debit cards?
Money is taken out of an account right away with debit cards, but money is borrowed when using credit cards.
You will be charged this whenever you do not pay your bill in full, and the cost depends on your credit history.
Interest rates; between 18% and 24%
Go to a bank and ask for this, they are specifically for people who do not have a good credit score, are a good option for your first credit card, and is connected to another account just in case.
Secured credit cards
What if..your credit card is lost or stolen. What are the two things you should do?
Notify credit card company, file a police report, and monitor financial records.
Fee you pay when you do not pay ff credit card debt within a single payment period.
Finance Charge
List 2 advantages of saving.
Safe alternative to cash; builds good credit history; bails you out of emergencies; gives you time to pay
This is a bad idea because finance charges will be added to the remaining balance and these charges add up month after month.
Paying the minimum monthly payment, this is the least amount. Paying under this can result in your card being turned off.
True or False: A higher credit score means lower and better advantage with loans.
True
What if..you have a bad credit report? Give 1 example.
Potential employers judge your credit score as a base of how responsible you are; tougher to get a car loan or mortgage
What is something of value held by a lending institution in case a loan is not repaid?
Collateral.
What are 3 items of information you might need to include on a credit application?
name, address, previous addresses, current and former employers, current job title, salary, and number of years employed, other sources of income, name a close relative (not in your home), and existing sources of credit.
True or False: A charge account usually involves a large down payment and a high-interest rate.
False
Describe 3 traits of a person who is a good credit risk.
is honest; job with steady income; made regular payments on past loan; lived in the same community; and has assets.
What if..you need to protect your identity, how could you protect yourself? Give 3 examples.
Keep your receipts; never give credit card number over the phone unless you started the call; be sure you get your card back; shred statements; keep track of transactions; closeout accounts; avoid giving out your social
What organization gathers financial information on individuals for businesses to use as a credit reference?
credit bureau
Provide 4 ways to build a credit history.
have a steady work record; pay bills on time; open/use savings and checking account; join credit union at work; apply for a gas credit card; purchase item using layaway; apply for a store credit card; pay on time
Charge accounts; credit cards; installment credit; and loans.
It is very important to read this to make sure you understand all of the terms.
Credit agreement
What if..you are getting your first loan, what might you need?
A ____ is the oldest type of credit offered by the business to consumers. There is usually no down payment and no interest charged.
Charge accounts