Unit 2 IDC 4U1

Four Pillars of Banking

Deposits, Investments, Insurance, and Credit.

Liquidity

Access to ready cash to cover short-term and unexpected expenses.

Overdraft Protection

A short-term loan to cover cheques written for amounts exceeding the chequing account balance.

Credit Card Financing

Allows financing purchases through financial institutions using cards like MasterCard and Visa.

Consumer Proposal

An offer made by a debtor to creditors to modify payment terms.

Identity Theft

The act of using someone else's personal information without permission for illegal gain.

Secured Loan

A loan backed or secured by collateral.

Interest Rate

The percentage charged on borrowed money, usually expressed as an annual rate.

Annual Fee

A yearly charge for having a credit card or service account.

Credit History

A record of a person's borrowing and repayment activity.

Emergency Fund

Savings set aside to cover three to six months of expenses.

Minimum Monthly Payments

The least amount required to be paid each month on a credit balance.

Revolving Open-End Credit

Credit that can be borrowed up to a maximum limit and paid back repeatedly.

Prestige Cards

High-status credit cards with additional benefits offered to individuals with exceptional credit.

Finance Charge

The total cost of borrowing, including interest and additional fees.

Collateral

Assets pledged as security for a loan.

Chequing Services

Bank services allowing access to funds through chequing accounts.

Certified Cheque

A cheque that is guaranteed by the bank, allowing immediate cashing by the payee.

Debt Level

The total amount of money that a person owes at one time.

Loan Security

The assurance provided to a lender regarding the repayment of a loan.