Checking Account

You are at the checkout counter at the local supermarket, use your debit card to pay for your groceries, and select “credit” when the cashier asks “Debit or credit?” Where does the money for this purchase come from?

• Your credit card company covers the cost

• It is deducted directly from your checking account

• Your credit card company provides you with a cash advance to cover the cost

• It is deducted from your credit card account

Jocelyn gets a text alert from the bank that her account has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?

• Wait until her monthly statement arrives so she can check to see if those withdrawals are still there

• Wait a week, as it is fairly common for the bank to catch mistakes like this

• Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry

• Contact her bank immediately as it appears that her account may have been hacked

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

Which action below is considered a best-practice for check writing?

• Using a pencil so that you can quickly erase any errors without having to throw any checks away

• Recording all of your transactions in a check register

• Leaving the “to” field blank until the very last minute, so that no one else can steal the check

• Writing quite sloppily in each field so that no one else can forge your handwriting

Using a digital wallet payment such as Apple Pay or Samsung Pay is considered safe because...

• Only major stores that can afford anti-hacking software accept these payments types

• You do not need to hand your card to the cashier, so your personal information and account number remain private

• Not very many people have smartphones capable of using that payment type

• They include overdraft protection for free when you use this payment type

Which of the following transactions may NOT be reflected on your account balance if you go online to check your balances?

• Check that you mailed to your cousin for his birthday today

• ATM cash withdrawal from yesterday

• Automatic payment for your car loan paid two days ago

• Debit card transaction from purchasing snacks at a local convenience store today

You visit a local bank that is FDIC-insured to open a checking account. Assume that you can only ask the bank representative one question before you open your account. What would it be?

• What is the interest rate on the account?

• What happens if my debit card is stolen?

• What is your schedule of fees for this account?

• Do I get cashback on all of my debit card purchases?

The largest source of fees for banks when it comes to checking accounts is...

• Wire transfer fees

• Check printing fees

• Interest expense

• Overdraft fees

How does a low-balance mobile alert on your checking account work?

• It will make it impossible to overdraw your account

• When triggered it will automatically transfer money from your savings account so you don’t overdraw

• It will freeze your account so that no one can make any withdrawals for 24-hours

• It will alert you when your balance falls below a certain amount, and you will know to stop spending until you can add additional funds

Why is it so important to have a checking account?

• Without a checking account, you are unable to cash your paycheck or pay your taxes

• A checking account facilitates the rest of financial life by making your money available when and where you need it while also keeping it safe

• Opening a checking account is the only way to gain access to a savings account, which is essential if you want to make money by investing

• Opening a checking account is the first step in building your credit history, which you will need in order to receive loans, scholarships, and grants for college