Financial Literacy
1. What is closed-end credit?
Closed-end credit is a type of basic consumer credit where a one-time loan that you pay back over time in payments of equal amounts.
2. What is open-end or revolving credit?
Open-end credit, also known as revolving credit, is loans made on a revolving basis with the repayment period not set.
3. What is collateral?
Collateral is something such as a house that can be used to back up a loan.
4. What are smart cards?
Smart cards are an innovative new type of card that contain a computer chip imbedded with our information, such as medical and driver’s license. While this could be used for things like tracking frequent-flyer miles, concerns have been raised for possible security and privacy concerns with smart cards.
5. What are debit cards? How do debit cards differ from credit cards?
Debit cards are cards that when used automatically subtract money from your account rather than extending credit like a credit card.
Critical Thinking Questions
1. What are the advantages of consumer credit?
Advantages of consumer credit include the ability to buy something now and pay for it later(if you consider that an advantage), being able to carry a larger amount of money safely, rebates and rewards, as well as the possibility of improving your credit score.
2. What are the disadvantages of consumer credit?
Disadvantages to consumer credit include the temptation to overspend, and the fact that it does not increase purchasing power. When consumer credit is misused it can lead to a loss of reputation, property and income.
3. What are some factors that influence a person's credit rating or their ability to get credit? How do each of these factors influence the extension of credit?
Factors that influence a person’s credit rating include debt, payment history, how long the debt has been open and the type of credit you have. Your credit score can influence the cost and amount of getting new credit.
4. What are three different cards that
Closed-end credit is a type of basic consumer credit where a one-time loan that you pay back over time in payments of equal amounts.
2. What is open-end or revolving credit?
Open-end credit, also known as revolving credit, is loans made on a revolving basis with the repayment period not set.
3. What is collateral?
Collateral is something such as a house that can be used to back up a loan.
4. What are smart cards?
Smart cards are an innovative new type of card that contain a computer chip imbedded with our information, such as medical and driver’s license. While this could be used for things like tracking frequent-flyer miles, concerns have been raised for possible security and privacy concerns with smart cards.
5. What are debit cards? How do debit cards differ from credit cards?
Debit cards are cards that when used automatically subtract money from your account rather than extending credit like a credit card.
Critical Thinking Questions
1. What are the advantages of consumer credit?
Advantages of consumer credit include the ability to buy something now and pay for it later(if you consider that an advantage), being able to carry a larger amount of money safely, rebates and rewards, as well as the possibility of improving your credit score.
2. What are the disadvantages of consumer credit?
Disadvantages to consumer credit include the temptation to overspend, and the fact that it does not increase purchasing power. When consumer credit is misused it can lead to a loss of reputation, property and income.
3. What are some factors that influence a person's credit rating or their ability to get credit? How do each of these factors influence the extension of credit?
Factors that influence a person’s credit rating include debt, payment history, how long the debt has been open and the type of credit you have. Your credit score can influence the cost and amount of getting new credit.
4. What are three different cards that