Chapter 9- Personal Finance
DEBIT OR CREDIT? Paying with your money: Entering a PIN number: Affects your credit score: Charges you interest: Has a rewards program: Sign on a screen: Buy now pay now Using the banks money Buy now pay later Does not affect your credit score at all:
Paying with your money: debit Entering a PIN number: debit Affects your credit score: credit Charges you interest: credit Has a rewards program: credit Sign on a screen: credit Buy now pay now: debit Using the banks money: credit Buy now pay later: credit Does not affect your credit score at all: debit
Which type of endorsement limits what you can do?
Restrictive
What are three reasons why people don't have checking accounts?
Some people don't trust banks, banks trace money and they may not have enough money to open one.
Which type of endorsement lets you transfer ownership of the check?
Special
What is the most common type of checking account?
Standard
T/F: A check CANNOT be cashed until it is endorsed.
TRUE
T/F: A checking account is different from a bank credit account.
TRUE
T/F: Cash is available immediately.
TRUE
T/F: For each NSF check processed, your bank will charge you a fee.
TRUE
T/F: Online banking is available 24/7.
TRUE
T/F: You CANNOT cash a check at an ATM.
TRUE
T/F: You can DEPOSIT checks and money at an ATM.
TRUE
T/F: You can check balances at an ATM.
TRUE
What's the usual initial deposit value range?
$50-$200
Be able to fill out a check and know how to write endorsements.
-
What is a full service bank?
A bank that offers every possible kind of service, such as savings/checking accounts, credit cards, safe deposit boxes, loans and ATMs
What is a checkbook register?
A booklet used to record checking account transactions
What is an overdraft?
A check written for more money than your account contains
What is a checking account?
A checking account allows you to write checks to make payments.
What is a checking account also known as?
A demand deposit, because the money may be withdrawn at any time--"on demand".
What is a trustee?
A person or institution that manages property for the benefit of someone else under a special agreement
What is a debit card?
A plastic card that deducts money from a checking account almost immediately to pay for purchases. It's presented at time of purchase.
What is a check?
A written order to a bank to pay the amount stated to the person/business named on it.
What is overdraft protection?
Allows you to cover checks/withdrawals up to a specified amount, usually between $100-$1000, depending on your typical balance in your acct. Your checks will be COVERED even if you have insufficient funds in your checking acct. Overdraft protection is LINKED TO YOUR CREDIT CARD . The way it works is that the insufficient funds in your checking account will transfer over to your credit card account so now, you owe money for the credit card, not your checking acct so you don't have to deal with overdraft fees.
ATM stands for?
Automated teller machine
What happens to a bad written check?
BOUNCE
Which banking concept is very useful in college?
EFT (electronic funds transfer)
T/F: Banks are mandatory for everyone.
FALSE
T/F: You have to be married to have a joint checking account.
FALSE
T/F: You need to be wealthy/rich to set up a trust fund so you can leave a lot of money for your children/grandchildren.
FALSE
T/F: Only some banks charge overdraft fees.
FALSE, EVERY BANK
T/F: You don't have to maintain enough money in your checking account to cover all the checks you write.
FALSE, you do
T/F: Safe deposit boxes are free.
FALSE; banks charge a yearly fee based on the size of the box.
T/F: There are limits to a debit card, but there are no limits to a credit card.
FALSE; debit (no limits) credit (limits) $$$
T/F: At an ATM, you can transfer money between your account and other people's accounts.
FALSE; only between your OWN
T/F: Checks are available immediately.
FALSE; usually takes about 24 hours to clear.
Most banks offer F___D___I___C_____ insurance. What is it?
Federal Deposit Insurance Corp. It protects the deposits of customers against loss up to $250,000. Your money is ENSURED.
What type of ATM transaction is most common?
Getting cash
What is debit card fraud?
If someone knows your PIN number or false card readers. False card readers occur most often at restaurants and gas stations
What is a notary public?
It verifies a person's identity, witnesses the person's sig. on a legal doc, and then "notarizes" the sig as valid.
What were ATM cards called back then?
MAC cards
If you deposit a CHECK into the bank, is that money available right now?
NO
A bank that does not honor a check (overdraft) usually stamps the check with the words ___ ___ ___ (NSF) and returns the check to the _____'s ____.
NOT SUFFICIENT FUNDS; payee's bank
What happened in 2008 to the FDIC?
The economy plummeted, which resulted in the housing bubble burst and the stock market crash. The unemployment rate went up drastically and government bailouts were handed out like candy on Halloween. Some banks and financial firms also went bankrupt. As a result, people wanted their money from the banks in their physical possession. At the time, the FDIC ensured $100,000, but because of the high demands of the people in 2008, the FDIC raised the value up to $250,000. This gradually stopped the complaints and protests and kept the people's money where they belonged.
What does a notary public do?
This person provides notary services for account holders, usually for free. For noncustomers, there is typically a small fee.
Why would you notarize something?
To make sure it's real, for docs that need more than just a signature. like death certificates.
What is an American express black card?
To qualify for this card, you must spend at least $250,000 each year. You can literally buy a house with this credit card.
Do most banks charge a fee for stopping a payment on a check?
YES
If you deposit cash into the bank, is that money available immediately?
YES
Can you do this at an ATM? a. Transfer money: b. Check your balance: c. Deposit cash and checks: d. Cash a check:
YES, YES, YES, NO
Besides loans, banks also provide ____ for estate planning and trusts
advice
Banks offering national credit cards charge both an _____ ___ for use of the card and _____ on the ____ _____ ____.
annual fee; interest; unpaid account balance
Which banking profession will soon be out of date/gone?
bank tellers
Examples of things kept in a safe deposit box?
birth/marriage/death certificates, will, bonds, jewelry. deeds and mortgage papers
What type of endorsement on the back of a check is the most common?
blank
Three types of endorsements?
blank, special and restrictive
When a bank does not honor a check, the check has _______.
bounced
What are the three most important types of loans that banks give out?
car loans, student loans, and house loans
4 Checking account advantages?
convenience: replaces large amounts of cash safety: ensured $ built-in record keeping system: you can find and fix mistakes that banks make access to bank services: being able to use any of the other bank services available to you
What is money made of?
cotton
Using a ____ ____, you can withdraw cash from your checking/savings account at an ATM.
debit card
Which demographic group despise banks?
elderly
What are the two major ways banks make money?
fees and loans
To use ATMs you must....
have an electronically coded card, and know your PIN number
Why would someone use a restrictive endorsement?
if the amount of money is very large
4 types of checking accounts? Describe each.
joint- two people, one account standard- most basic student- high school and college. after you graduate college, your account turns into standard interest- for people who have extremely large balances
What is an electronic funds transfer (EFT)?
most banks allow this. It uses a computer based system to enable you to move money from one account to another w/o writing a check or exchanging cash.
Financial institutions typically have a person on their staff who is a _____ _____.
notary public
What are some services banks offer?
online banking, telephone banking, certified checks, cashier's checks, money orders and debit cards
What is the number called on a check that tells you which bank the check is from?
routing number
What thing does a bank offer you to keep your valuable documents/things in?
safe deposit box
What two things do you need to open up a checking account?
signature authorization form and initial deposit
What do you do if you want to make a check in circulation void?
stop-payment order
What must you know in order to make a stop-payment order?
the check number
Why do people make a stop-payment order? (usually)
the check was lost/stolen
4 services online/telephone banking services provide:
transfer money from one account to another, pay bills by authorizing the bank to disburse $, get account balances and see which checks cleared and which deposits were entered
Banks can act as ____ of estates for minors and others
trustees
On ______, it takes longer for checks to clear.
weekends
What is a trust fund?
when you reach a certain age/accomplish something/do something, you get this amount of money usually left behind by your dead relative or alive relative.
Three things you can do with a checking account?
write checks, pay bills online, make deposits, using a checkbook register
