FL Unit 4: Banking & Credit

What are characteristics of a commercial bank?

• privately owned

• has little government regulations over it

• insured by the FDIC

• both A & C

How are Credit Unions are different from banks?

• Your money is not insured by the FDIC in a credit union.

• Credit Unions are not regulated by the government since they are members only.

• Credit Unions are nonprofit organizations owned and operated by members.

• Credit Unions are for profit and banks are limited in how much profit they can make.

Which of the following is NOT TRUE about credit?

• It's never a good thing.

• Allows consumers to use items before completing payment for merchandise.

• Allows people to pay for an item over a specified time period.

• Stimulates growth by promoting stability in the economy.

Which of the following is TRUE about a revolving account (open-end credit)?

• Would be something like a car loan or mortgage.

• Is where the monthly payments are the same until you pay the item off.

• Allows you to keep adding to what you owe (make new purchases) as long as you make the minimum monthly payment and do not exceed your credit limit.

• All of the above could be true about revolving credit.

Which of the following is TRUE about an installment account (closed-end credit)?

• Is where the monthly payments are the same until you pay the item off

• Would be something like a car loan or mortgage

• Allows you to keep adding to what you owe as long as you make the minimum monthly payment.

• Only A & B are true about installment loans (closed-end credit).

Which credit score will make it easier to get credit, to get lower rates of interest, and help you get a discount on your car insurance?

• Anything over 100

• Anything over 300

• Anything over 500

• Anything over 750

What is your credit score can range?

• 0-1,000

• 0-100

• 100-800

• 300-850

What does a low credit score mean?

• You have lots of debt.

• You have missed payments or defaulted on your debt.

• You will probably have to pay higher interest rates because companies see you as a higher risk.

• All of the above could be associated with low credit scores.

This law requires each credit reporting agency to provide consumers with a free copy of their credit report when requested once every 12 months.

• Fair Credit Reporting Act

• Equal Credit Opportunity Act

• Credit Card Accountability & Disclosure Act

• Dodd-Frank Wall Street Reform & Consumer Protection Act

What are the benefits of using an Internet bank as opposed to a commercial bank?

• You may be offered higher interest rates.

• You need to research where free use ATMs are located.

• You should not use it if you are not comfortable with technology.

• All of the above are true about Internet banking.