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credit & banking
unit 2
| Question | Answer |
|---|---|
| filing system | a way to keep all your banking records in one place so your paper is organized |
| bank statement | a monthly record of what happened with your bank accounts in terms of deposits withdrawal,transfers, interest earned , and fees |
| reconcile | to match your personal banking records to the bank records |
| balances | the amount you owe on your credit card that you did not pay on prior bills; it is also the amount that remains in your checking account after reconciling |
| budget | a financial plan that lists planned expenses and revenues |
| income | money received or earned |
| expenses | the things on which you spend money, such as food, clothing, rent, and transportation |
| short-term goals | the end results you want to achieve generally within one or two years |
| long-term goals | a planned and deliberate effort aimed at achieving a specific end result; usually takes five years or even a lifetime to reach |
| discretionary expenditures | the goods and services beyond the essentials of food, shelter, and clothing that are bought |
| opportunity cost | the value of the best alternative given up when making a choice |
| expenditure | money or funds that are spent |
| credit card | a plastic card that allows buyers to finance purchases; purchases may be charged up to an approved limit |
| investment | the use of money in the hope of making more money |
| loan | something (usually money) that is borrowed; a money loan is expected to be paid back with interest |
| good debt | money owed on something you will get a return on, such as an investment; these investments (such as a house, a business, college tuition) ideally will ultimately provide a higher return than your debt |
| bad debt | money owed on something that has a high cost per used value, and is used up quickly (such as vacations and entertainment) |
| financing | the act of providing or acquiring capital in order to pay for a good or service |
| layaway | plans for people who want to buy products but cannot pay for them in full right away; plans usually require the buyer to make regular payments over a period of time |
| secured loan | a loan that requires you to put up property to guarantee the loan; the property is referred to as collateral |
| collateral | property that is used to secure a loan |
| unsecured loan | a loan that does not require collateral |
| installment loans | any loan that is paid over time |
| debit card | a card that allows you to withdraw money from your bank account |
| pawnshops | a shop that provides loans that are based on the value of the item used as collateral |
| title loan | a loan that offers cash from the lender in exchange for your car title |
| payday loan | a loan that offers cash advance from your personal check |
| interest rate | the amount charged or paid for the use of money |
| expenditures | money or funds spent |
| financing | the act of providing or acquiring capital in order to pay for a good or service |
| identity theft | taking of ones identity to then commit fraud |
| dumpster diving | thieves go through your garbage to find documents with your personal info |
| skimming | dishonest salespeople use a special device that records your card info as they process your card |
| phishing | send you emails in the name of banks ,companies or government info trying to trick you into giving them your personal information |
| hacking | people with computer skills use software to break into your emails and online accounts |
| credit card fraud | new checking account opened in your name to create large charges |
| phone/ utilities charge | may add new phone to your account or use your name to gain access to utilities |
| bank fraud | writing counterfeit checks in your name, open other accounts, duplicated atm card to drain your accounts |
| what is credit score | predicts how likely you are to pay a loan back in time |
| what is a scoring model | something that uses information from your credit report to create a report |
| factors affecting your credit | payment history (35%) , amount owed( 30%), types of credit in use( 10%), new credit (10%) , length of credit history (15%) |
| Very Poor ( no loans) | 579-less |
| Fair (you can get approved for loans but very high interest ) | 580-670 |
| Good ( most will approve loans average interest rate ) | 670-720 |
| Very Good (approved for money good interest rate) | 720-799 |
| Exceptional ( lower than average interest rate) | 800 and above |
| FICO score and credit aren't the same thing true or false | false FICO and credit scores are the same thing |
| what is a car loan | a secured loan used to buy a car |
| interest rates for a car loan is not as high as | personal loans because they can just take your car if you don't pay |
| who gives out car loans | banks, credit unions, online leaders, dealership financing |
| car loans from banks | compares rates and get approved ( high end credit score only ) |
| car loans from credit unions | lower cost and lower interest rates |
| car loans from online lenders | convenient but rates can fluctuate |
| car loans from dealership financing | partnered with lenders and banks super convenient |
| leasing | based around a yearly plan in which you would need to renew each year |
| most dealerships require no less than a ______% down payment, but wise to go no less than ________% | 10 20 |
| down payment | how much are you going to offer up front to pay for the car |
| the more money you put down | the lower your monthly payment and interest will be |
| interest rate | what the lender charges in return for providing the loan |
| a good credit score and shorter payment schedules can help | lower interest rate |
| APR | annual percentage rate |
| annual percentage rate | total of all interest rate and fees |
| loan term | amount of time in which you have to pay back the loan 24084 months on average |
| co-signer | applying with someone who has good credit that can take responsibilities of the payment if you cannot |
| verifiable income | proof of income which shows you can pay for the loan |
| rent payments are set at a | fixed rate |
| what do you get when you buy a house | a deed |
| mortgage | a loan for a house in which you pay back over a set of period of time also have longer loan times |
| put down a down payment that is usually no less than | 10% |
| fixed rate mortgage | has set monthly payment and interest rare |
| adjustable rate mortgage | interest is fixed for an initial term then changes based on the market |
| interest rates are brutal on housing loans floating around | 3-4% that gets tagged onto your mortgage |
Created by:
Zariii
Popular Economics sets