Extra Credit
What is a credit utilization ratio?
The percentage of your credit limit that you are currently using, calculated by dividing your total credit card balances by your total credit limits.
What is an ATM fee?
A fee charged by banks or ATM operators when you use an out-of-network ATM to withdraw cash.
What is the "gold Standard"?
the government backs its currency with a reserve of gold, and currency can be exchanged for a specific amount of this precious metal.
What is a debt consolidation loan?
A debt consolidation loan is a personal loan used to pay off multiple debts, combining them into one single payment, often with a lower interest rate.
What is auto insurance, and why is it required?
Auto insurance provides financial protection against accidents, theft, and other vehicle-related damage. It is required to ensure that drivers can cover the costs of damages or injuries they may cause while driving.
What is a secured credit card, and how does it differ from a traditional credit card?
A secured credit card requires a cash deposit as collateral, which serves as your credit limit. It is different from a traditional credit card, which does not require collateral and has a credit limit based on your creditworthiness.
What is overdraft protection, and how does it work?
Overdraft protection is a service that allows transactions to go through even if you do not have enough money in your account, typically by linking to a savings account or line of credit. The bank usually charges a fee for this service.
What was a cause of the great depression?
Due to market speculation, the federal reserve “called in” it’s loans. the stock market crashed, wiping out billions of dollars in wealth. This crash undermined consumer confidence, leading to a reduction in spending and investment. As stock prices fell, people lost confidence in the banks, leading to mass withdrawals in what are known as "bank runs." Banks, unable to meet the sudden demand for cash, failed by the thousands.
What is the difference between the "debt snowball" and "debt avalanche" methods?
The debt snowball method involves paying off debts from smallest to largest balance, while the debt avalanche method focuses on paying off debts with the highest interest rates first.
Daily Double!!!
How long do negative items, such as late payments, remain on your credit report?
Negative items generally remain on your credit report for seven years from the date of the first delinquency.
What is a money market account, and how is it different from a regular savings account?
A money market account is a type of savings account that often offers higher interest rates and allows limited check writing. It differs from a regular savings account in that it may require a higher minimum balance and offer more flexible access to funds.
what is the theory of supply and demand?
The theory of supply and demand explains how the prices of goods and services are determined in a market based on the interaction between sellers (supply) and buyers (demand). The equilibrium price is reached when the quantity supplied equals the quantity demanded. Changes in supply or demand can shift the market equilibrium, affecting prices and quantities
What is the grace period on a loan or credit card?
A grace period is the time during which you are allowed to pay your bill without incurring a late fee or additional interest charges.
What is a deductible in an insurance policy?
A deductible is the amount of money you must pay out of pocket before your insurance company will pay for a covered loss.
What is a credit freeze, and when might someone use it?
A credit freeze is a tool that restricts access to your credit report, making it harder for identity thieves to open accounts in your name. It is often used after a data breach or identity theft.
Question: What is a cashier’s check, and why might someone use one?
A cashier's check is a check guaranteed by a bank, drawn on the bank’s own funds, and signed by a cashier. It is often used for large transactions where the seller wants to ensure the funds are available.
What gives modern money (fiat currency) value?
Fiat currency has value because a government decrees it as legal tender and people have confidence in its stability and purchasing power. Unlike commodity money, fiat currency is not backed by physical assets like gold or silver but instead relies on trust in the issuing authority and the economy's strength.
What is a student loan deferment, and when might it be used?
A student loan deferment is a temporary pause on loan payments, typically used when a borrower is experiencing financial hardship or is enrolled in school at least half-time.
What is life insurance, and what are the two main types?
Life insurance is a policy that pays a sum of money to a designated beneficiary upon the insured person's death. The two main types are term life insurance, which covers a specific period, and whole life insurance, which covers the insured's entire life.
What does it mean to have a credit score of 800 or above?
A credit score of 800 or above is considered excellent and indicates that a person is a low-risk borrower, often qualifying them for the best interest rates and terms on loans and credit cards.
What is a certificate of deposit (CD), and how does it work?
A certificate of deposit (CD) is a savings product that offers a fixed interest rate for a specified term. In exchange for keeping your money in the account for the term's length, you receive a higher interest rate than a regular savings account.
What was the most preeminent cause of the revolutionary war?
When King George the III outlawed the interest free independent currency the colonies were using and forced them to borrow money from the central bank of England with interest causing economic hardship.
What is the impact of declaring bankruptcy on your credit score?
Declaring bankruptcy can significantly lower your credit score and remain on your credit report for up to 10 years, making it difficult to obtain new credit.
What is disability insurance, and why is it important?
Disability insurance provides income replacement if you are unable to work due to illness or injury. It is important because it helps protect your financial stability in case of a long-term disability.