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Banking and Credit - 2021

Banking and Credit - 2021

Assessment

Presentation

Other

9th - 12th Grade

Medium

Created by

MaryEllen Fines

Used 24+ times

FREE Resource

11 Slides • 7 Questions

1

Banking and Credit

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2

Being a good learner

  • Stop videos and take notes

  • Pay attention to anything that is typed in Canvas (terms and definitions)

  • Retake what you can

  • econdlowdown, rewatch edpuzzle

3

Multiple Choice

Describe the difference between secured and unsecured credit

1

Unsecured credit enables lenders to seize an asset if a loan is not paid, while secured credit prohibits lenders from taking material objects.

2

Secured credit is risky because banks cannot seize assets, while unsecured credit is less risky because it is backed by material objects.

3

Unsecured credit is backed by an asset equal to the value of a loan, while secured credit is not guaranteed by a material object.

4

Secured credit is backed by an asset equal to the value of a loan, while unsecured credit is not guaranteed by a material object.

4

Secured Loan

The lender can take a possession if you don't pay.

*Possible lower interest rates because of this.

5

Credit Cards

Why do people use them if there could be fees, interest, and debt problems?

6

Secured Loan vs. Secured Credit Card

  • Secured Loan - The lender will give me a loan because they feel SECURE

  • Why? Because they can take something from me (collateral)

  • Secured Credit Card - I give them a set amount of money to actually GET the credit card.

  • I can than charge up to that amount.

  • The lender feels SECURE because they already have my money.

  • It is like collateral upfront, but they can't take my possesions.


7

Discussion Type Questions

  • Why would I want to have a secured loan?

  • Why would I want to have a secured credit card?

8

Installment Loan vs. Revolving Credit

  • Installment - same payment every month until it is paid off.

  • Examples: college loan, car loan, buy new furniture set

  • Revolving Credit - can keep borrowing and paying as long as under the limit

  • Examples: credit card, store credit cards, gas cards

  • If you don't charge for 6 months and you have a $0 balance, then you don't pay.

  • Once you charge, you make a payment.

  • Or you let it sit, and have a fee and interest for not paying.

9

Multiple Choice

Which of these credit payback strategies would lead to the HIGHEST interest charges?

1

Make the minimum payment every month

2

Make the minimum payment every month but you are sometimes late

3

Paying your balance in full every month but you are late once or twice per year

10

Multiple Choice

Federal Deposit Insurance Corporation (FDIC) is

1

An insurance that customers buy to protect their money.

2

To protect you so that you will not overdraw too much money from your checking account

3

Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business.

4

Insurance bank branches can buy to protect their business against fraud and scams.

11

Multiple Choice

A card provided by a bank that allows a point-of-sale transaction replacing cash and checks.

1

debit card

2

ATM card

3

credit card

4

gift card

12

ATM Card

Used in a cash machine by punching in a code or PIN. Used to deposit or withdraw money.

13

Multiple Choice

In a banking institution, what type of account provides the highest interest?

1

Money Market Savings

2

Savings

3

Certificate of Deposit

4

Checking Account

14

Why does a CD offer a higher interest rate?

  • The loan is for 1,3, or 5 years

  • You can't take money out without penalty

  • This way the bank can take your money along with others and invest it at a higher interest rate and make money

  • ...since it takes longer to make more money

15

Multiple Choice

What is not true about Credit Unions?

1

They offer higher interest rates on savings than regular banks.

2

They do not make a profit like regular banks.

3

They are insured by the FDIC

4

They are owned by the people who use their services.

16

Insurance at a Credit Union

Federally insured credit unions offer a safe place for you to save your money, with deposits insured up to at least $250,000 per individual depositor.


The National Credit Union Administration (NCUA) is the independent agency that administers the NCUSIF.


Like the FDIC's Deposit Insurance Fund, the NCUSIF is a federal insurance fund backed by the full faith and credit of the United States government. 

17

Multiple Choice

Tyeon bought a TV now has a $2000 balance on her credit card.

The interest rate (finance charge) on her card is 22%.

She is going to pay $50 each month to pay off her debt.


Use the Credit Card Payoff Calculator

https://www.bankrate.com/calculators/credit-cards/credit-card-payoff-calculator.aspx


How much will she actually be paying for the TV?

1

$2,000

2

$1,637

3

$3,637

4

$2,637

18

Overdraft Protection - Why would you want it?

  • You have autodraft payments for your rent and what if you don't have enough money in your account?

  • You tend to forget to pay bills on time

  • Better to be charged a fee now and then as opposed to defaulting on a loan

Banking and Credit

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