Financial Literacy Flashcard

Front

What is an excellent credit score beneficial for in car financing?

Back

Qualifying for a low interest rate.

Front

How does the 50/20/30 Rule break down your take-home pay?

Back

50% needs, 20% on saving, and 30% on wants.

Front

What is the main difference between credit and debit cards?

Back

With debit cards, you're spending your own money at point of sale, but with credit cards, you're getting a loan that you need to pay back later.

Front

If your net pay is $2,500 and your expenses are $2,625, how would you describe your budget?

Back

You have a deficit of $125.

Front

What is the maximum amount Duc can spend on his credit card with a $1000 limit and an $800 balance?

Back

$200.

Front

What does a credit score represent?

Back

A numerical expression of a person's creditworthiness.

Front

What is the purpose of a budget?

Back

To plan and track income and expenses.

Front

What is a surplus in budgeting?

Back

When income exceeds expenses.

Front

What is a deficit in budgeting?

Back

When expenses exceed income.

Front

What is the function of a credit card?

Back

To allow users to borrow funds up to a certain limit for purchases.