Credit Scores
What is a credit score?
A 3 digit number that tells you how likely you are to pay your money back/pay your loan off.
What is the difference between a credit card and debit card?
Credit is money you are loaning, debit is money you already have.
What is a savings account?
Money that you are not using daily... in a separate account to build over time.
Why is it important to keep track of your expenses?
So you do not go into debt and you can save money. So you do not overdraft.
What does FOMO stand for?
Fear of missing out
Why is a credit score important?
What is a pro to having a credit card?
Rewards and building your credit score
List two ways you can access funds through a checking account.
ATM's, bank teller, cashback at a store, debit cards
What should you do if your expenses exceed your income?
Get rid of some expenses/prioritize.
What is an overdraft fee?
A fee you are charged if you spend more than is in your checking account
What is considered a prime credit score range?
660 and above
How can using a debit card help with budgeting?
It allows you to only spend money that you already have.
Why is it important to keep track of how much you have in your checking account?
So you do not overdraft
What does it mean to pay yourself first?
Pay off your essentials and then pay towards your savings goals before anything else.
List one important mobile banking feature and why it’s important.
Being able to transfer money, shut off your card, track your expenses, deposit checks
What are two factors that can affect your credit score? Think about the pie chart.
Payment history, length of credit, new credit, credit mix, how much you owe
List two consequences of NOT paying your bill on time.
Fees, lowers your credit score, you have to pay interest
What is the difference between a regular savings account and a high-yield savings account?
High-yield has a higher interest rate
What is the rule of thumb for emergency funds?
At least 3 months worth of bills in your emergency fund.
How can FOMO and cognitive bias affect someone’s spending habits?
If you feel like someone else has something then you might want it to, or you might be thinking you got a good deal on something which makes you think you need to buy it
Explain how paying your bills on time impacts your credit score.
If you pay your bills on time it will build your credit score because it shows you are more reliable and trustworthy with paying off a loan.
Describe the concept of interest rates in relation to credit cards.
If you don’t pay off your full balance you will owe interest and that interest will build over time
Describe how compound interest can benefit savings over time.
It's interest that keeps gaining interest... AKA basically free money over time as a reward to saving your money.
What does the 50/30/20 rule stand for?
50% needs, 30% wants, 20% savings
Explain why someone in their 70’s may have a higher credit score than someone in their 30’s.
They have longer credit, could have paid off their debts, may have multiple types of credit, should have more money, so should have an easier time keeping up with payments or just paying for things without taking out another loan