Checking 1.1 Review

Two benefits of having a checking account are safety and convenience. Which of the following statements is FALSE?

• If you have a checking account, you won't need to carry as much cash with you.

• With a checking account, you have several options for how to pay bills.

• You can cash checks for free when you cash your paycheck at your bank.

• In order to shop online, you must use a debit card.

Which of the following people would be LEAST likely to benefit from opening a checking account?

• A teenager whose part-time job pays roughly $100 per week.

• A young child who receives a $5 allowance each month.

• A senior citizen who is retired and whose only income is Social Security.

• A successful business person who already has a savings account and owns some stock in a company.

Wanda's bank is FDIC Insured. What is the benefit to Wanda?

• If she makes a purchase with her debit card and the item breaks, she'll get a full refund.

• She can use her bank card at any bank, nationwide, without incurring a fee.

• If Wanda's bank goes out of business, she will receive all of her money back from her accounts up to $250,000.

• She will receive a debit card and a checkbook she can use to make purchases.

It's Thursday, and Eileen has $200 in her checking account. Her rent of $650 is due tomorrow. Fortunately, she receives her paycheck from work for $1300 at the end of today’s workday. Why MIGHT Eileen choose to cash her check at the check casher instead of depositing it into her bank account?

• Banks are known to lose people's money, frequently, and she shouldn't take that chance

• If Eileen's landlord wants to be paid in cash, it's not possible to get cash at the bank -- the check casher is her only option

• It can take a few days for Eileen's check to "clear" at her bank; in that time, her check to the landlord might bounce.

• Depositing a check at a bank typically costs $10 or more; the check casher will be more cost effective

Which statement about debit and credit cards is TRUE?

• Both cards draw money directly from your checking account when you make a purchase

• Debit cards REMOVE money from your checking account while credit cards ADD money to your checking account

• Debit cards, credit cards, and ATM cards all mean the same thing

• Both cards allow you to make purchases online and at major stores.

You are taking a community college course during high school to get a jumpstart on your college credits. You need to purchase your own textbook, and you find a woman online who is selling the book used for a 45% discount. Which is the most secure way to pay this person?

• Mail her cash in an envelope

• Call her and read your debit card numbers to her over the phone

• Use a person-to-person payment app

• Take a picture of your debit card front and back, and send that over via email

Which of the following transactions will REDUCE your checking account balance immediately?

• Writing your monthly rent check which you will mail tomorrow

• Using your debit card to pay for groceries at the supermarket

• Using your credit card to pay for your school books

• Depositing a check at a local bank branch

Misty is debating whether to open a checking account or to use a prepaid card instead. What is the number one concern she should have if she decides to go with the prepaid card option?

• Many stores do not accept prepaid cards because they are riskier

• Prepaid cards often have a lot of hidden fees that will reduce her balance

• Prepaid cards can be used in stores but they can’t be used to shop online

• Prepaid cards cannot be reloaded with additional funds, so she’ll need to buy a new one every time she receives a paycheck

Person-to-person payments are becoming more popular, so it’s a good idea to understand how they work. Which of the following is TRUE?

• To use a person-to-person payment, both people must have a checking account at the same bank

• Paying a cashier using your debit card is an example of a person-to-person payment

• Person-to-person payments typically have large fees attached, so you should use them sparingly

• Person-to-person payments are usually conducted using a smartphone app rather than a computer

Mike’s grandmother is collecting donations for a charity she believes in, and Mike wants to support her. He needs to decide how to send her funds from his checking account. Which factor is LEAST relevant in his decision making?

• Does Grandma have the technology capable of receiving this type of payment?

• How secure is the payment method he’s considering?

• How quickly will Grandma receive the money?

• Will he receive perks or bonuses by choosing this payment method?