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What does using your debit card as a credit mean?
It means you sign your name for the transaction instead of entering your PIN
Direct Deposit
The electronic transfer of a payment directly from the account of the payer to the recipient's office
What are the signs of being a victim of identity theft?
• Unexplained charges or withdrawals
• Medical bills for doctors you haven't visited
• New credit cards you didn't apply for
• Errors on your credit report
• Collection notices or calls for unknown debt
• Your credit card or application for credit is denied
• Missing mail or email
• Errors on your tax return or Social Security Statement
• A warrant for your asset
How do you access money in your checking account?
There are numerous options, such as using a debit card, online banking, writing a check, or withdrawing money at an ATM or branch office
What are three methods of paying a bill?
• Cash
• Check
• Mobile payments
What transactions will reduce your checking account balance immediately?
Pending transactions, such as point-of-state debit card transactions or funds that are on hold in accordance with the Bank's Fund Availability Plan
What features do online and mobile banking offer?
• Manage accounts
• Pay and transfer
• Budget and track
• Bank securely
• Mobile banking app
When using checks, what should you always do?
Date and sign check
PROs and CONs of Overdraft Protection
✅ PROs
• Your transaction will happen
• The recipient will not know
• You avoid overdraft fees
• You typically pay less
• You have access to funds in an emergency
❌ CONs
• You pay fees even if you don't overdraw
• You may still need to pay overdraft fees
• Your transactions may still be declined
• You may be tempted to overspend
• Your bank may revoke services
How are credit unions and banks different?
Banks are typically for-profit institutions. Credit unions are not-for-profit and distribute their profits among their members
How are digital wallet apps considered safe?
Each transaction is protected by the app, retail outlet, credit card company, and the bank or credit union that issued the card
How quickly are different payment types processed?
EFTs are usually processed the next day for checks. 1-2 days after deposit. Out-of-state checks take longer
How long do checks take to appear on your statement?
2-5 business days after its initial deposit into your bank account
What does FDIC and NACU stand for? What do they mean? What limits are there to their purpose?
FDIC: Federal Deposit Insurance Corporation
NACU: New American Colleges and Universities
What is the largest source of fees for banks?
What is a low-balance alert and how does it work?
Low-balance alerts let you know when your bank account balance drops to a predetermined amount, which could be $20, $500, or another selected amount. Depending on the bank, these alerts can come in the form of an email, text message, a push notification, or all the above
Checking statement
A bank statement listing all transactions for a bank card
Checking agreement
A form required to be filled out by a customer opening a checking account
What happens when you try to spend money you don't have in your checking account when you DO and DO NOT have overdraft?
Overdraft protest automatically transfers the funds you are short to cover the money you spent. Without overdraft protection, the check is returned for non-sufficient funds (bounced) and you are charged a fee by the bank and possibly the payee tax
What are the benefits of having a checking account?
• No need to carry cash
• Funds in your checking account are insured by NACU or FDIC
• Convenience
What are the characteristics of check cashing businesses?
Check cashing, money orders, electronics bill payment, and small loans
Rule of 72
A quick and useful formula that is popularly used to estimate the number of years required to double the invested money at a given annual rate of return
How to compute simple interest?
Multiply the principal amount by the interest rate and the time
What are the features of the different types of savings options?
Interest rate, initial deposit, minimum balance requirements, account fees
What is the process of determining the affect of interest rate compared to yearly fees on a savings account?
Banks state their savings interest rates as an annual percentage yield (APY), which includes compounding
How hard is it to open a savings amount? How much money do you need to open one?
It is hard because you'll need to provide a valid government-issued photo ID (driver's license/state ID) to open one. You need between $25 and $100 to open an account
What do you need to open a savings account? What kind of identification? What age? What can you do to circumvent the age limit?
• Identification
• Proof of Address
• Must be a U.S. citizen
How important is FDIC insurance?
It is essential because it protects the money depositors place in the insured in the unlikely event of an insured-bank failure
How long of a period does it take to earn the interest rate offered by a posted interest rate?
What are the differences between simple and compounding interest? What balance does each one use to calculate interest?
Simple interest is calculated on the principal, or original amount of a loan. The compound is calculated on the principal amount and the accumulated interest of previous periods, and thus can be regarded as "interest on interest"
What are the most important factors to consider when opening a savings account?
• Interest rate
• Minimum cash balance
• Presence or network of the bank/financial institution
• Service charges
• Debit card deals
• Doorstep banking facilities
What is the most effective strategy for personal savings?
Save automatically
What is an emergency fund for? When should you use yours?
An emergency fund is a cash reserve that's specifically set aside for unplanned expenses or financial emergencies. Some examples of when you should use it includes car repairs, home repairs, or financial emergencies
How do you calculate how much should be saved in an emergency fund?
Add up essential living expenses for one month and multiply that by either 3 or 6 to determine how much makes you comfortable to have for an emergency
Which savings options offer the highest returns on investments?
• CDs
• TIPs
• Money Market Accounts
What is the longest-term savings goal?
Saving enough money to retire
What are examples of short-term savings goals?
• Buying a new car
• Paying down student loans
What are examples of medium-term savings goals?
• Finishing paying off student debts
• Saving for your wedding
• Saving for your first house/renovations to your current home
How do you determine the amount you should save for a goal if given the cost of the goal, how much you make and how long until you want to buy it?
By using a savings goal calculator to input your target amount, starting balance, time to grow, and interest rate
What should your goal be in regards to interest-bearing accounts and the inflation rate?
Are interest rates on savings accounts fixed or adjustable?
Variable
Do you want fixed rates for interest-bearing accounts or interest-charging accounts? Does it matter?
Where should you save your money? Where shouldn't you save your money?
✅
• Savings accounts
• CDs
• Money market funds
• Money market deposit accounts
❌
• In a non-interest-bearing checking account
• In an NFT
• In crypto
• In a long-term CD
What is wealth? What is the equation to determine someone's wealth? What is the equation to find debit loan?
Wealth is the total assets that give you financial security. The equation is net worth = total assets - total liabilities - intangible assets
How does the 50-30-20 rule of budgeting work? Which percentage relates to what category?
You should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should be split you between 20% savings and debt repayment and 30% to do everything else that you might want
What is delayed gratification?
The ability to delay an impulse for an immediate reward to receive a more favorable reward at a later time
What is immediate gratification?
A term that refers to the temptation and resulting tendency, to forego a future benefit in order to obtain a less rewarding but more immediate benefit
What are the best options for saving for retirement?
• 401(k) plans
• IRA plans
How do you save towards multiply goals at the same time?
• Prioritizing
• Categorizing
• Investing
• Reviewing
What are the most important features of a credit card offer?
• Interest rate
• Fees
• Rewards
• Introductory rates
• Where can you use it?
Schumer Box
A table that appears in credit card agreements
What does it mean if the Schumer box shows a range of APRs?
It means they can change periodically in step with a benchmark figure called the prime rate
What is the effect of late payments on your credit card interest rate?
Your interest rate could go up
How do change in the Prime Rate affect a variable rate credit card's interest rate?
Does a debit card help you to build your credit score?
Usually, they don't help build your credit
What does a credit card bill look like and how do you read it?
It is basically a summary of activity in your account
What are the differences between debit and credit cards?
When you use a debit card, the funds for the amount of your purchases are taken from your checking account in almost real-time. When you use a credit card, the amount will be charged to your line of credit, meaning you will pay the bill later on, which gives you more time to pay
What is one benefit of having a credit card?
When used responsibly, credit cards can be valuable tools for earning rewards, traveling, handling emergencies or unplanned expenses, and building credit
What is a secured credit card? How do they work? Who are they best suited for?
Secured credit cards work similarly to traditional credit cards, other than you pay a cash deposit upfront to guarantee your credit line
What questions should you ask about cashback offers from credit card companies?
• Is this the right to apply for a card?
• Am I the right candidate?
• What's the APR?
• Is there an annual fee?
• Is there a rewards program?
• How does the offer compare to the other offer?
• Does the bank report bureaus?
• Do I need another credit card?
• What are the credit card fees?
• What else can the card offer me?
How do amortized loans work? What is the best method to pay less interest? What effect does paying more than the monthly payment have on the loan?
An amortized loan payment first pays off the interest expense for the period. Any remaining amount is put towards reducing the principal amount. The best method to pay less interest is by paying more than the minimum every month. When making an extra payment or payment that's larger than the required amount, you can designate the extra funds to be applied to the principal
What are personal loans? What are personal loan offers based on? Are they secured or unsecured?
Personal loans are money borrowed from a bank, credit union, or online lender that you pay back in fixed monthly payments, or installments, typically over two to seven years
When getting a mortgage, what factors go into the monthly payment?
Principal, interest, taxes, and insurance
What purchases should be covered by student loans? What is the most responsible use of student loans?
What are the features of Federal student loans?
Fixed interest rates and income-driven repayment plans
What are the features of a payday loan?
What are the features of leasing a car?
What aspects of loans affect the total interest paid? How can you lower the interest paid over the term of a loan and how would you pay the highest amount of interest?
You need your principal loan amount, interest rate and the total number of months or years you will repay the loan. You can lower the interest paid over the term of a loan by paying down the principal
What is an example of a fixed rate, secured debt?
Mortgages and auto loans
Would it be a good idea to stop paying some loans in order to focus on a bigger or more expensive loans?
What is a revolving line of credit? - A type of loan that's automatically renewed as debt is paid
A type of loan that's automatically renewed as debt is paid
What is peer-to-peer lending?
The practice of lending money to individuals or businesses through online services that match lenders with borrowers
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