Learning your credit and checking account A B Cs
- Jeff Hulett
- Sep 26, 2023
- 1 min read
Updated: Oct 5, 2023
For James Madison University BUS 200 Personal Finance class.
Watch the following videos and answer the questions below the videos.
1. What is Credit? The Basics of Credit
1. What is credit?
2. What is revolving credit?
3. What is a credit score?
4. What is a secured loan?
5. What is a credit limit?
6. What is a cosigner?
7. What is a credit report?
8. Why is credit important?
2. What is a credit card?
1. Discuss the costs and benefits of using credit cards.
2. How do you get a credit card?
3. What happens when you use a credit card?
4. Identify and explain three items on your monthly credit card statement.
5. All credit cards charge interest. What can you do to reduce the costs of paying interest?
6. What factors should you consider when selecting a credit card?
3. Checking Accounts
1: What is the primary purpose of a checking account?
2: What identifies your bank for electronic transfers?
3: How does money enter your checking account?
4: What happens during the 'clearing' process?
5: What is an overdraft?
6: What is a debit card used for?
7: What is the main difference between a checking account and a savings account?
8: What is 'settlement' in the context of a checking account?
9: What does overdraft protection do?
10: How has digital banking impacted checking accounts?
What is credit?
The ability to borrow money or receive goods/services now with the promise to repay later.
What is revolving credit?
A credit line that you can use, repay, and reuse (e.g., credit cards).
What is a credit score?
A numerical measure of creditworthiness based on your credit history.
What is a secured loan?
A loan backed by collateral that the lender can take if you default.
What is a credit limit?
The maximum amount you’re allowed to borrow under a credit agreement.
What is a cosigner?
Someone who agrees to pay back a loan if the primary borrower fails.
What is a credit report?
A detailed record of your credit history and current credit accounts.
Why is credit…
1. What is credit?
Credit is the ability to borrow money or obtain goods and services now with the promise to pay later.
2. What is revolving credit?
Revolving credit lets you borrow up to a set limit, repay some or all of what you owe, and then borrow again as needed.
Example: Credit cards.
3. What is a credit score?
A credit score is a number that shows how likely you are to repay borrowed money. It’s based on your credit history, payment record, and other financial information.
4. What is a secured loan?
A secured loan requires collateral—something of value like a car or a deposit—that the lender can take if you don’t repay.
5. What is a…
Credit: The ability to borrow money or access goods with the promise to pay later.
Revolving credit: A type of credit that allows you to borrow, repay, and borrow again up to a set limit.
Credit score: A numerical representation of your creditworthiness based on your credit history.
Secured loan: A loan backed by collateral that the lender can claim if you default.
Credit limit: The maximum amount you can borrow on a credit account.
Cosigner: Someone who agrees to repay a loan if the primary borrower cannot.
Credit report: A detailed record of your credit history and financial behavior.
Why credit is important: It affects your ability to borrow, get favorable interest rates, and access financial opportunities.
Costs/benefits: Credit…
The ability to borrow money now and repay it later, often with interest.
A credit line that lets you borrow, repay, and borrow again up to a set limit (e.g., credit cards).
A numerical rating (usually 300–850) that reflects how likely you are to repay borrowed money.
A loan backed by collateral, such as a car or savings account, that the lender can take if you don’t pay.
The maximum amount you’re allowed to borrow on a line of credit or credit card.
Someone who agrees to repay a loan if the main borrower fails to do so.
A record of your credit history, including loans, credit cards, and payment behavior.
It affects your ability to borrow money, rent housing,…