Credit, Debit, & Credit Scores

Credit, Debit, & Credit Scores

Wrap Up

Credit Card Avantages

• Helps to buld credit

• Earn rewards like cash back and mileage points

• Free credit score information

• Increased purchaing power

• No linkage to checking 0r savings account

• Putting a hold on for rental car or hotel room

Credit Card Disadvantages

• Interest charges

• Overspending temptation

• Late charge fee

• Potential to damage credit

• 
  

• 
  

Multiple Choice

1. Which is not an advantage of a credit card?

• Build credit score

• Can give rewards like cash Back

• Offers unlimited money

• Protetion against fraud

Multiple Choice

2. y = kx --> (total interest) = (APR)(money on credit card)

Solve for k.

• k = ^y/x

• k = x/y

• y = k/x

Multiple Choice

3. You gained $5.00 in your allowance this week. Is that a credit or a debit?

​

• Credit

• Debir

Understanding How a Credit Card Works

• Access o free money

• Represents a loan

• Limit as to to the money you can borrow

• Interest is an extra charge for borrowing money

Multiple Choice

4. Money is withdrawn directly from a checking or savings account.

• Credit card

• Debit Card

• Both

Multiple Choice

5. Each purchase is a loan that is repaid later

• Credit card

• Debit card

• Both

Multiple Choice

6. Convenient to use.

• Credit card

• Debit card

• Both

Multiple Choice

7. A PIN (Personal Identification Number) is required to make a purchase.

• Debit card

• Creit card

• Both

Why is Having A Good Credit Score Important?

• Lenders look at a higher credit score as a safe person to loan money to and they are more likely to loan you money

• If you have a high credit score, lenders may offer you a lower interest rate.

• A high credit score tells landlords that you are more likely to pay your rent on time and possibly a lower deposit.

• 
  

FICO Credit Score

• 35% Payment History - Making on time payments makes credit score go higher. Missing payments/making late payments lowers credit score.

• 30% Current Debt -  A lot of debt compared to credit limit can make your credit score go down. Regularly paying down your debts helps.

• 15% Credit History -  Longer history of managing credit tends to make credit score higher. No/little credit history may keep your score low.

FICO Score

• 10% New Credit Applications: Applying for too many credit cards can hurt your credit score. Do your research and consider applying for only the credit cards you need.

• 10% Types of Current Credit - Maintaining a variety of credit accounts like car payments, house payments and credit cards can help your credit. Just having credit cards can keep your score lower.

Multiple Choice

8. Payment history accounts for around _______ of your credit score.

• 50%

• 75%

• 35%

• 9%

Multiple Choice

9. What type of credit score is this 570?

• Average

• Great

• Poor

• Excellent

Multiple Choice

10. Which is an exceptional credit score?

• 672

• 713

• 555

• 813

Multiple Choice

11.Applying for a credit card only affects your credit score if you use the card.

• True

• False

Multiple Choice

12. A high credit card limit can be a bad thing

• False

• True

Multiple Choice

13. You must carry a balance on your credit cards to build a credit history.

• True

• False

Multiple Choice

14. Which of these show your credit history?

• Credit score

• Credit report

• Both

Important Facts About Credit

• It is not free money

• If you are late on your monthly credit card payment, you will have to pay interest.

You should not rely on your credit card

Debit cards and Credit cards look similar but act very differently.

Your debit card uses money you have already earned, should be what you use to pay for goods.

Ex. Food and gas, everyday needs should be paid with by a debit card

Multiple Choice

15. What are interest fees on a credit card?

• The amount in percentage you must pay if you are late

• The amount you are allowed to spend

• The maximum amount on the card

There is a limit on what you can spend on your credit card

• Credit card companies have a 'credit limit' a max amount that you can use on that credit card.

Your creditor IS NOT OK with you missing your credit card payments

This isn't your parents, this isn't a video game where you get another chance, this is real life. BE RESPONSIBLE.

You will be penalized, and it will hurt your credit score and standing with the bank.

Multiple Choice

16. There is no limit on your credit card

• True

• False

DO NOT RELY ON YOUR CREDIT CARD FOR ONLINE PURCHASES

• Uber - Shopping online - App store orders

• It is so easy & seems so painless using credit cards & having it connected to online services. DO NOT FALL INTO THIS TRAP

• Companies work very hard making it easier for you to make purchases. Recognize this, be smart.

Multiple Choice

17. When you use a debit card you are using __________.

• the bank's money

• your parent's money

• your money

Multiple Choice

18. When you use a credit card, you are using

• your parent's money

• your Aunt Sandi's money

• the bank's money

Multiple Choice

19. All of these are examples of types of credit except:

• savings account

• college loan

• credit cards

• car loan

Multiple Choice

20. Overspending and accumulating too much debt can ruin your credit score

• True

• False

Multiple Choice

21. Credit scores are based on certain criteria such as

• religion

• gender

• payment history

• all of these

Multiple Choice

22. A Pre-paid credit card

• is connected to your bank account

• is not connected to your bank account.

Multiple Choice

23. What can happen if you have a low credit score

• Good chance you will get approved

• APR (Interest) will be high

• APR (interest) will be low

• It's easy to get credit

Multiple Choice

24. A Good rule to improve your credit score

• Pay your bills on time

• Go over your credit limit

• Pay your bills late

• Use credit when you don't need to

Multiple Choice

25. Money that you owe

• debt

• credit

• collateral

• interest