23 unit career ready

Explain the basic difference between a regular checking account and a special checking account.

2) Regular Account: often called a minimum balance account, requires that the customer maintain a certain minimum balance. As long as the minimum balance is in the account, there is no extra charge. If the balance drops below the minimum amount, however, the customer will have to pay a service charge. B) Special Account: often called a cost per-check account. With this type of account, you pay a flat monthly service charge plus a small amount for each check you write. Special accounts are for people who only write a few checks each month. A young person opening his or her first checking account should carefully consider this type of account.

Name the 5 kinds of information you must write on a check

3) A) Date B) Payee C) Numerical amount D) Written amount E) Signature

What is a mistake people often make with their check registers? How can this mistake be prevented?

A common mistake people make in maintaining a checking account is not recording checks in the register. This often happens when someone is in a hurry. Get in the habit of filling out the check register at the time you write a check. If you don't, you won't know the correct balance and might overdraw the account.

Name and briefly explain the 2 basic types of credit.

A) Loan Credit: involves money borrowed in order to buy something. Most of these loans are for major expenses. A borrower may not have cash on hand to pay for a house, car, or college education. The buyer usually gets a loan at one place and spends the cash in another. B) Sales Credit: When using loan credit, you borrow money. Sales credit, however, allows you to purchase goods and services directly and delay paying until later.

How should you endorse a check if your name is misspelled on the face of the check?

Endorse a check exactly as it is made out. Do this even if your name is written improperly or misspelled. When there is an error, you endorse the check first as is, followed by the correct way.

What is the practical purpose of the APR?

Annual Percentage Rate (APR): is percentage cost of credit on a yearly basis.

What does the finance charge include?

The Finance Charge is the total dollar amount you pay for using credit. It includes interest, service charges, insurance premiums, and other fees.

In simple terms, what is the purpose of balancing a checkbook?

The purpose of balancing a checkbook is to ensure that both you and your bank have recorded your checks, your deposits, and other activity in your account accurately.

Let's say you bought a new car, paying $2,000 down and $178.60 a month for three years. What was the total cost of the car?

the total cost $8,429

Name and briefly describe the 5 types of EFT services.

1) Automated teller machines (ATMs): These 24-hour electronic terminals permit you to bank at your convenience. You simply insert your EFT card in the machine and enter your personal identification number (PIN). You can then withdraw cash, make deposits, or transfer funds between accounts. 2) Telephone banking systems: These systems permit you to telephone your bank and instruct it to pay certain bills or transfer funds between accounts. Transactions are conducted via voice mail menus and Touch-Tone commands. 3) Computer banking systems: Banking through the Internet is becoming very popular. Individuals can pay bills, transfer funds, check account balances, and generally manage their accounts completely online. 4) Direct deposits or withdrawals: You can arrange for sums of money that you receive on a regular basis, such as a paycheck, to be deposited automatically into your checking account. You can also have regular bills, such as rent payments and insurance premiums, paid in the same way, by automatic withdrawals from your account. 5) Point-of-sale transfers: These transfers let you pay for retail purchases with your EFT or debit card. A debit card is a plastic card used to immediately transfer funds for a purchase from a bank account to a seller. This is similar to using a credit card, except that the money for the purchase is immediately transferred.

What are the two major advantages of having a checking account?

1) Checking accounts have two main advantages: A) Safety and Convenience: Checks provide a safe and convenient way to pay bills. It is unsafe to carry large amounts of cash. B) A second advantage of checks is that they make it easier to keep good financial records. A canceled check a check that has been paid and returned to you for your records is legal proof of payment.

There are four major types of financial institutions. Name and briefly describe them

1) Commercial Banks: Commercial banks may also be known as bank and trust companies or community banks. Commercial banks are the most common type of financial institution. 2) Mutual Savings Banks: Mutual savings banks began early in the 19th century in order to serve ordinary people that commercial banks often overlooked. In theory, a mutual savings bank is owned by its depositors. There are only about 18 states that charter mutual savings banks. Most are in the Northeast. Such banks generally provide the same services as commercial banks. In addition, they offer some of the services of a savings and loan association. 3) Savings and Loan Associations: Other names for these institutions are building and loan associations, cooperative banks, savings associations, and homestead associations. They provide more home mortgage business (loans to buy homes) than all other lenders combined. 4) Credit Unions: Credit unions (CUs) are nonprofit savings and loan cooperative associations. They are made up of people who have something in common. This could be a place of employment, a union membership.

What are the 3 main types of sales credit?

open charge accounts, revolving charge accounts, and installment accounts