Debit and Credit (Junior Achievement)

Which statement is FALSE?

• A debit card allows you to immediately transfer money between checking and savings accounts

• A debit card is essentially like a paper check but does not require the processing time that a check does

• A debit card is handy when you don't have the money in your account

• A debit card means you are paying now with no grace period to pay it off

What does online banking allow you to do?

• Only check your balance

• Only pay bills

• Only transfer money

• Virtually anything you can do at a physical bank

Which of the following is a financial institution?

• A department store

• A bank or credit union

• An ATM machine

• A school

The big difference between a bank and a credit union is that credit unions are not-for-profit.

• True

• False

The higher someone's credit score, the lower the risk they are generally to the lender.

• True

• False

When lenders lend money to borrowers, they charge an additional fee for the use of their money. This fee is called:

• Debit

• Interest or finance charge

• Overdraft

• Credit

An advantage of a credit card over a debit card is:

• They take money directly out of your bank account

• They have a lower interest rate

• You don't have to apply for one

• If they are stolen, they have a lower limit you could be responsible for ($50 compared to $500)

Lenders use credit agencies like Equifax or Trans Union to determine:

• The credit risk of the borrower

• What grades the lender got in school

• An applicants payment history

• Whether an applicant has any outstanding debts

A process where someone who owes debts they can't pay is given protection from the creditors.

• Bankruptcy

• Debt

• Co-payment

• Investing

Any money owed is called:

• Credit card

• Mutual fund

• Debt

• Premium