Christmas Personal Finance Flashcard

Front

If you purchase $500 worth of Christmas gifts on a credit card with a 20% annual interest rate and only pay the minimum payment, what happens?

Back

Interest will accrue on the unpaid balance.

Front

You plan to save $300 by next Christmas. If your savings account earns 2% annual interest, what is the main benefit of keeping the money there?

Back

The interest earned will increase your savings.

Front

What happens when you use a debit card to buy Christmas decorations?

Back

The purchase is deducted directly from your bank account.

Front

You take out a $1,000 personal loan to cover holiday expenses. If the loan has a 10% interest rate, how much interest will you owe at the end of one year?

Back

$100

Front

You set a Christmas gift budget of $400 but spend $600. What is the result?

Back

You have overspent by $200 and may need to adjust other spending.

Front

You’re tempted to use your emergency savings to buy gifts. What is the best financial decision?

Back

Avoid using the emergency fund for non-emergencies.

Front

“Buy Now, Pay Later” options are popular during Christmas. What is a potential risk of using this service?

Back

Missing payments could result in late fees or credit damage.

Front

A store offers 15% off purchases if you sign up for their credit card. What is the potential downside of signing up?

Back

It may increase your debt if you overspend and don’t pay the balance.

Front

You want to buy gifts for 10 people on a $500 budget. What is the average amount you can spend per person?

Back

$50

Front

You use your debit card for holiday shopping, but your account has insufficient funds. What happens?

Back

You may incur an overdraft fee.