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Types of Credit/Borrowing |
Car Loan, Credit Card, Mortgage, Student Loan, Pay Day Loan, Store Credit Card |
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Which method calculates the most accurate interest on a loan – Simple Interest or Amortization Schedule? |
Amortization Schedule (Loan Payment Calculator) |
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How often should you check your credit report? |
Once a year |
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Credit |
A way for you to buy something now and pay for it later |
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Debt |
The total amount of money you owe other people |
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Interest |
The cost of borrowing money |
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The maximum amount you can charge/spend on your credit card |
Credit Limit |
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The length of the loan |
Loan term |
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The amount you are charged if you go over your credit limit on your credit card. |
Over-the-Limit Fee |
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Three things to consider when taking out a loan |
Purchase Price (Principal), Interest Rate, Loan Term (How Long) |
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Simple Interest Formula |
I= PxRxT (Interest = Principal x Rate x Time) |
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Payment types that requires you to pay upfront |
Pre-paid Card, Money Order, Cashier’s Check |
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Debit Card |
A payment method that allows you to withdraw funds directly from your checking account |
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A payment method that typically charges the highest interest rates? |
Payday Loan |
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The APR (annual percentage rate) on a credit card determines______. |
The amount of interest you are charged on credit card purchases. |
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Making a minimum payment on your credit card means: |
You are paying a small portion of your credit card debt |
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What can cause your credit card’s APR to increase? |
Missing a credit card payment |
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What is a credit card balance? |
The amount of money you owe the credit card company |
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How many different credit scores does each person have? |
Three |
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Three Main Credit Reporting Agencies |
Equifax, TransUnion, Experian |
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What is a credit score used for? |
To determine how likely individuals are to repay their debts. |
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A person’s credit score can impact the following: |
Ability to be approved for loans, ability to get jobs, insurance rates, ability to buy a house or rent |
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Positive impacts to credit score |
paying bills on time, using a small amount of available credit |
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Negative impacts to credit score |
opening multiple credit card accounts, using a large percentage of your credit limit, making late payments |
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No impacts to credit score |
Paying bills in all cash, disputing an item on your credit report, inquiring about a credit card charge, using your debit card, living with your parents and allowing them to pay the bills |
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What has the biggest influence on your credit score? |
Payment History (whether or not you make them and if they are on time) |
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What is the best way to improve your credit score? |
Paying off your debt |
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Credit Score Range |
300-800 |
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A good credit score is____ |
700+ |
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What should you consider before taking out any loan or borrowing money? |
Needs vs. Wants (Do I really NEED this or is it something I WANT?) |
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