Personal Finance #3
Why do people use pawnshops, payday loan companies, rent to own centers, and car title loan companies instead of regular banks?
Because they do not have a bank account, good credit , or a consistent enough paycheck to open a bank account
What are the four basic mistakes made by people managing their daily money
1) Overspending 2) Lack of liquid assets 3) Using savings or borrowed money to pay for current expenses 4) Not having an investment plan
What are four services offered by banks
1) Place to save money 2) Payment Services 3) Borrowing 4) Financial planning
If you report a stolen debit card within two days you are only liable for ___, from 3 to 60 Days ____ and over 60 days _____.
1- $50 2 - $500 3 - all the charges
How do car title loan companies work and give one advantage and disadvantage?
A car title loan is when you get a high interest cash loan using your car title as collateral. A advantage is the loans are for 30 days. A disadvantage is if you do not pay the loan back in 30 days you lose the vehicle.
What is a store value card?
A card that is used for services like bus, subway, highway tolls, etc.
How do check cashing outlets work and give one advantage and disadvantage?
A check cashing outlet is when they charge you a fee to pay checks. A advantage is you will get instant access to your money. A disadvantage is the fees can be high.
Explain how pawnshops work and give one advantage and disadvantage?
A pawnshop is when people use personal possessions to secure loans on a short term basis. A advantage is they do not charge high fees. A disadvantage is if you do not pay the loan they keep the item.
How do payday loan companies work and give one advantage and disadvantage?
A payday loan is when you write them a check and they will hold of cashing it until your payday. A advantage is they are easy to apply and qualify for. A disadvantage is they charge very high interest rates.
How do rent to own centers work and give one advantage and disadvantage?
A rent to own center is where they sell household goods at extremely low monthly prices at high interest rates. A advantage is monthly you pay low prices. A disadvantage is in the end you end up paying 3 or 4 times the price of the actual item.
How does a web only bank work?
Everything is online and there is no physical building.
What do savings and loans and mutual saving loans specialize in? What is the difference between the two?
Savings loans and mutual savings banks specialize in savings account and mortgage loans.The different is the mutual savings banks are owned by their depositors.
What is a certificate of deposit (CD) and give one advantage and disadvantage?
The money is in lock from 30 days to several years. You have a fixed rate of return but if you pull it out early you get charged a interest penalty. One advantage is it returns a better interest rate than a savings account. One disadvantage is the more you invest the higher the interest rate.
What is a peer to peer transaction?
Transferring money with cell phones or internet services. Ex) paypal, venmo, google wallet
What are two differences between a commercial bank and a credit union?
Two differences are a credit union is for nonprofit/owned by their members and a commercial bank is for profit.
What is a savings bond and give one advantage and disadvantage?
You buy the bonds at a discounted rate and redeem them on their due date for full value. A advantage is they are low risk. A disadvantage is they have a low rate of return.
What is a mobile transfer?
You have a bill pay app on your phone and you wave or tap the phone scanner in the store.
What is one advantage and one disadvantage of using a credit card?
advantage - delays payment of purchase disadvantage - if you do not pay it off each month then you will have to pay interest
What is one advantage of using a debit card over a credit card?
advantage - limits spending
What are four factors that will impact the rate of return on an investment.
1) Inflation 2) Taxes 3) Safety 4) Liquidity
How is a smart card different from a regular credit card?
It has a microchip that creates a one time transaction number for each time it is used, makes it harder for thieves to steal your information.
How is money market different for a regular savings account?
It is different because it offers better rates than a savings account and you have to keep a minimum balance in your account.
What is a prepaid debit card and what is one advantage and one disadvantage of this type of payment method?
It is where you have a predetermined amount on the card then use it like cash. A advantage is you can use it like cash. A disadvantage is there can be different fees.
What is the difference difference between mobile and online banking?
Mobile - on a phone Online - on a computer