Your Money and Credit Exam #2

a _____ card deducts money directly and immediately out of your account, and are offered by online banking

debit

cards that electronically subtract money from your savings or checkin accounts and are most commonly used at ATMs

debit cards

For simple interest on the ______ balance, interest is paid only on the amount of original principal not yet repaid

declining

Checking accounts are also known as ____ _____

demand deposits

____ _____ is used for paychecks and other regular income and is offered by online banking

direct deposit

_____ loans: from finance and check cashing companies, retailers such as car or appliance dealers, bank credit cards and cash advances

expensive

the total amount paid to use credit. includes interest costs and fees, service charges, credit related insurance premiums, or appraisal fees

finance charge

_____ _____ are non-deposit institutions that make short and medium term loans to consumers. They have higher rates.

finance companies

Other _____ _____ are insurance, investment, real estate purchases, tax assistance, trusts, and financial planning

financial services

money market ____ are not covered by the FDIC

funds

_____ ______ loans are loans based on the current market value of your home minus the amount you still owe on the mortgage

home equity

What to do if your ____ is stolen: 1. contact the 3 major credit bureaus 1. contact creditors 3. file a police report

identity

______ loans: from parents and family members

inexpensive

_______: higher consumer prices result in lower buying power of interest earned on savings. Compares rate of return vs the _____ rate

inflation

______ _____ checking accounts are checking accounts that are paying low interest

interest earning

_____ _____ are non-deposit institutions that are mutual funds and money market funds

investment companies

certificates of deposit have ____ liquidity and have a guaranteed rate of return for the time of the CD.

less

_____ _____ _____ are non-deposit institutions that offer insurance plus savings and investments. Some also offer financial planning and investing services

life insurance companies

6 types of non-deposit institutions are:

life insurance companies, investment companies, brokerage firms, credit card companies, finance companies, mortgage companies

______: ease with which savings can be withdrawn

liquidity

borrowing money with an agreement to repay along with interest within a certain amount of time

loans

when interest rates are falling you should select ____ term savings instruments to lock in earnings at the current high rate

long

when interest rates are rising you should use ___ term loans

long

_____-_____ loans: from commercial banks, savings and loan associations, and credit unions

medium priced loans

_____ _____ ______ and _____ having floating interest rate, allow limited check writing, have a higher minimum balance

money market accounts and funds

_____ ____ ____ are a kind of investment companies that are combination savings and investment plans. They are not covered by the FDIC.

money market fund

_____ _____: purchase at financial institution, post office, store

money order

money market accounts and funds have ____ liquidity and have favorable rate of return.

more

_____ _____ are non-deposit institutions that provide home mortgage loans

mortgage companies

_____ _____ ____ are deposit institutions that specialize in savings accounts and mortgage loans. They are owned by their depositors, with profits going back to depositors by paying a higher rate on savings

mutual savings banks

used as needed until line of credit max is reached

open-end credit

______ are problematic financial businesses that make loans on possessions, have higher fees, and are used for quick cash

pawnshops

_______ ____ _______ are problematic financial businesses that give cash advances, check advance loans, postdated check loans, delayed deposit loans, and have high interest rates.

payday loan companies

checking accounts and automatic payments are _____ ______

payment services

____ ____: rate banks charge large corporations

prime rate

_____ __ _____: percentage increase in value of savings due to interest, increases with frequency of compounding

rate of return

______ ______ _____ are also known as passbook savings and statement accounts and have low minimum balances, easy withdrawal, are insured, and have a low rate of return

regular savings accounts

____-__-____ _______ lease merchandise at high interest rates to low income customers

rent-to-own centers

_______ and ____: minimum balance limitations and fee for additional transactions

restrictions and fees

When making a deposit there are 3 types of endorsements, one type requires "for deposit only" and is known as a _____ endorsement

restrictive

____-_____ _______ differentiates customers based on credit information. Higher rates are charged to riskier customers

risk-based pricing

_____: availability of deposit insurance

safety

Time deposits and savings and certificates of deposits are all types of ____

savings

____ & ____ ______ are deposit institutions that offer checking accounts, specialized savings plans, loans and financial planning, and investment services

savings & loan associations

credit unions have interest earning or ____ _____ accounts that require a minimum balance

share draft

when interest rates are falling you should use _____ term loans

short

when interest rates are rising you should select ____ term savings instruments to take advantage of higher rates when they are mature

short

_____ ______: computed on principal only without compounding the dollar cost of borrowing

simple interest

plastic card equipped with a computer chip that can store 500 times as much data as a normal credit card

smart cards

Liquidating savings accounts, CD's, and mutual funds or borrowing with either a credit card advance or a personal loan

sources of quick cash

When making a deposit there are 3 types of endorsements, one type requires "pay to the order of" and is known as a _____ endorsement

special

____: taxable interest reduces amount of earnings.

taxes

Annual Percentage Yield, or APY, is defined as the "_____ _____" which is based on annual interest and frequency of compounding

total percent

________ _____: sign each check twice

traveler's check

rate of return is also known as _____

yield

total liabilities/ net work should be less than

1

bankruptcy can be reported for __ years

10

Consumer credit payments should not exceed a maximum of __% of your net income

20

FDIC is insured up to _______ per person per financial institution and for certain retirement accounts

250,000

a FICO credit score is between ___ and ___

350 and 850

you may request a copy of your credit information within __ days of being denied credit

60

adverse dat can be reported on a credit report for _ years

7

____ = rate per period x # of periods per year

APY

____ are used to be able to obtain cash, check account balances, and transfer funds. these are offered by online banking

ATMs

percentage cost of credit on a yearly basis. the key to comparing costs when shopping for rates

Annual Percentage Rate (APR)

_____ or _____ management accounts are offered by investment companies and others to provide a complete line of financial services including checking accounts, ATM card, credit card, online banking, line of credit for quick cash loans, access to a variety of investments

Assest, Cash

____ gives all applicants the same rights and credit providers may not discriminate based on age, Social Security or Public Assistance, or housing loans

ECOA

The 3 major credit bureaus

Experian, Trans Union, and Equifax

_____ ______ _______ ____ of 1971 is a law that requires put of date information to be deleted, gives consumes access and the ability to correct misinformation, places limits on who can obtain your credit report

Fair Credit Reporting Act

__ & __ cards are not really credit cards, the balance is due in full each month. Examples are Diners Clubs, American Express. You don't pay for services and goods at the time you purchase them

T&E cards; Travel and Entertainment Cards

"_____ __ ______ ___" requires disclosure of fees on deposit accounts, interest rate, and annual percentage yield

Truth in Savings Act

money market ____ are covered by the FDIC

accounts

____-___ interest: interest is calculated on full amount of principal; interest added to original principal; payment = total divided by number of payments to be made

add-on

you may request a free copy of your credit report _____

annually

____ _____ ______ _____ is used for recurring payments and is offered by online banking

automatic payments transfer funds

When making a deposit there are 3 types of endorsements, one type requires only a signature and is known as a _____ endorsement

blank

____ ____ are non-deposit institutions that act as an agent for buyers and sellers of financial products.

brokerage firms

the C for can you repay your loan

capacity

the C for what are your assets and net worth

capital

An asset management account is also called a ____ _____ _____

cash management account

_____ _____: check from a financial institution; you pay the face amount and a fee

cashier's check

Rising rate or bump, stock-indexed, callable, promotional are types of various ___

certificates of deposit

_____ of _____ require minimum deposit, required time on deposit, have penalties for early withdrawal, take care when rolling over

certificates of deposit

_____ _____: personal check with guaranteed payment

certified check

the C for will you repay your loan

character

The 5 C's of credit

character, capacity, capital, collateral, conditions

____-____ _____ are problematic financial business that charge 1-20% of check's face value. AKA currency exchanges

check-cashing outlets

one time loans for a specific period and specific amount that is paid back in a specified period of time

closed-end credit

the C for what if you don't repay your loan

collateral

____ ____ are deposit institutions and are organized as corporations that offer a full range of financial services

commercial banks

4 types of deposit institutions are:

commercial banks, savings and loan associations, mutual savings banks, credit unions

Overspending, insufficient liquid assets, using savings or borrowing to pay for current expenses, failing to put unneeded funds in an interest bearing or investment account

common mistakes of meeting daily money needs

the C for what if your job is insecure

conditions

use of credit by individuals for personal needs, except a home mortgage

consumer credit

An arrangement to receive cash, goods or services now, and pay for them in the future.

credit

agencies that collect information on how promptly people and businesses pay their bills

credit bureaus

_____ _____ _______ are non-deposit institutions that specialize in short term loans

credit card companies

typically contain detailed credit data along with considerable personal information

credit files

a record of your complete credit history

credit report / or credit file

____ ____ are deposit institutions that are user-owned, non-profit, and provide comprehensive financial services. They have lower fees and lower loan rates.

credit unions