DECA Credit, Credit Cards, Economics

What is the US Credit Card Debt?

$880.5 Billion

What is the average balance per open credit card?

$1,157

What is the average owed per home for U.S Households that have Credit Card Debt?

$15,799

What percent of Americans pay only the minimum payment on credit cards?

34%

What is interest?

the price of money that is borrowed.

What is credit?

When goods, services, or money is received in exchange for a promise to pay a definite sum of money at a future date.

What is a Borrower?

Requests money, goods or services from a lender.

What is a Lender?

Gives borrower credit if they beieve money will be paid back.

How does the borrower return the money borrowed from the lender?

Pays back the lender with interest.

What is a credit card?

A plastic card that holds pre-approved credit.

What can pre-approved credit be used for?

the purchase of items now and payment of them later.

What is the credit-limit?

the maximum amount of money that can be charged on the credit card.

The amount of money charged on. a credit card can be paid in one single payment or

a series of equal or unqeual monthly payments

What is charged to a credit card each month that the amount of money owned is not paid in full

interest

The ___ the cardholder takes to pay off the amount of money charged, the ___ the total interest charges will be.

longer, larger

shorter, larger

longer, smaller

What is minimum payment?

the minimum amount of a credit card bill that must be paid monthly

The minimum payment is usually___of the total amount that the cardholder owes on the credit card

only a small portion

the main portion

half the portion

A cardholder who ___ every month will pay lots of interest and make slow progress toward paying off what is owed on the credit card.  

only makes the minimum payment

pays their debt in full

What is a credit card offer?

displays the costs of a credit card, including interest rates and fees charged.

How old do you have to be to get a credit card?

21

18

25

16

Can consumers under the age of 21 still get a credit card?

Yes but they need a co-signer

No, they are not allowed

Yes and they have 100% control over it.

What is a co-signer?

Someone who is eqully responsible for the loan of a credit card.

What is a debit card?

a plastic card that is electronically connected to a depository institution account that holds the cardholder’s money.

When a debit card is used to make a purchase, the money is immediately taken out of ____.

the account.

the bank.

What are some benefits of credit cards?

Convinient, useful for emergencies, reservations, possible benefits

Gives you more money, pays interest

What are some drawbacks of credit cards?

paying interest, additional fees, temptation to overspend, responsible for lost or stolen card.

don’t need to carry around cash, no interest

What is a lay payment fee?

charged when a cardholder does not make the minimum payment by the due date.

over-the-limit fee

charged if the amount of money charged goes over the card’s credit limit.

What is penalty interest

additional interest given if late payments are made or credit limits are exceeded.

What is penalty APR?

a higher interest rate that is charged on new transactions. 

What is a credit card statement?

it summarizes important information about a credit card account.

Where are credit card statement sent to?

the cardholder every month and include information regarding credit card use from the previous month.

What information is on a credit card statement?

transactions during the previous month, the current amount owed, the minimum payment due, and the payment due date.

What is the payment due date?

the date the minimum payment must be paid.

What are soem safty tips for owning a credit card?

report lost/stolen cards, notify card company when closing, sign the back with see I.D, never give out your card number, keep a list of your accounts in case account is stolen.

When the economy slows, the FOMC would __ the target range for the federal funds rate.

decrease

What would happen to the prime rate, federal funds rate, car loan interst rates, and etc, when the FOMC decreases the target range for the federal funds rate?

all would decrease

What are economic indicators?

a macroeconomic measurement used by analysts to understand current and future economic activity and opportunity.

What would happen to the consumer/business borrowing and spending rate and employment rate when the FOMC decreases the target range for the federal funds rate?

would increase