Debit and credit

Who uses financial institutions?

Almost everyone who maintains a savings or checking account, uses debit or credit cards, or needs a loan

Banks want college students to have their credit cards. Why do you think this is? Is it a good idea? Explain your answer.

College students having a credit card can be a good idea if they are responsible. Banks want college students to have their credit cards so that they become lifelong customers. Banks earn money when students buy things and don't pay the balance in full each month.

An example of a financial institution is:

a bank

advantage and disadvantage of credit card

advantages: provides preapproved credit, convenient when you don't have cash available at the time of purchasing an item, allows you to pay for things in an emergency that you might not be able to afford disadvantage: credit cards charge a high interest rate, credit cards are not frew money

Lenders use credit agencies to determine

all of the above

A bank is a not-for-profit financial institution

false

Internet banking means using a bank branch to make deposits and withdrawals

false

The lower an applicant's credit score, the lower the risk to the lender.

false

When lenders lend money to borrowers, they charge an additional fee for the use of their money. This fee is called:

interest

A credit card provides preapproved credit.

true

Identity theft is a threat to anyone with a good credit rating.

true

You order your favorite foot-long sandwich with chips and a drink using your debit card. The total comes to $5.68. Your online statement shows a charge of $40.68. The extra amount is an overdraft fee.

true

Identify the incorrect statement

A debit card is handy in an emergency when you don't have the money to spend

. To keep your account safe, create a strong password when banking online. Name two additional safety tips when banking online

Keep my user name and password private; don't store my account number or PIN on my mobile device; log off my account and close the browser window when finished.

Define online banking.

Online banking is an electronic way to view account activity and pay bills via the Internet and an institution's website