D&S Final Exam 1

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

• The account on Mars

A person-to-person payment would best be used in which of these situations?

• To give a donation to someone soliciting contributions outside the grocery store

• To repay your uncle who covered the cost of your first semester textbooks

• To buy some school supplies and baseball equipment while shopping online

• To give a tip to the waitress at a diner

How are credit unions and banks different?

• Typically, deposits at a bank are insured, but deposits at a credit union are not

• Banks charge overdraft fees, but credit unions do not

• Banks are owned by shareholders, while credit unions are owned by members

• Banks allow customers to do online banking, while credit unions are too small to provide that service

If you deposit $200 into a CD (Certificate of Deposit) with an interest rate of 1% for 3 years, how much simple interest will you earn after THREE years?

• $1

• $5

• $6

• $18

Juan saved $1,000 from his summer job cleaning pools. Which of these savings vehicles would work best for him if he doesn't need access to the money for a number of years AND wanted to earn the highest interest rate?

• Regular savings account

• Money Market account

• Checking account

• Certificate of Deposit

Which list includes the most important factors to consider when opening a savings account?

• The fees, the interest rates, and the minimum deposit to open the account

• The fees, the interest rates, and the bank’s brand recognition

• The fees, which bank your friend uses, and the minimum deposit to open the account

• The fees, which bank your friend uses, and the bank’s brand recognition

A credit card offer comes in the mail with this offer "0% A.P.R. for New Accounts." Which important piece of information should you find before thinking about signing up?

• Can I get two or more cards with this offer?

• Can I pay my credit card bill online?

• What is the A.P.R. after the introductory period?

• What kind of designs can I get on my card?

Each of the following financial products will help you build credit history EXCEPT:

• Secured credit card

• Debit card

• Home mortgage

• Credit card

What financial product am I? > I am a type of credit card that requires cardholders to make a security deposit equal to the credit limit on their account. Due to this deposit requirement, I am often a good choice for young people looking to establish their credit history.

• Secured credit card

• Standard credit card

• Overdraft credit card

• Rewards credit card

What are the two most important factors in calculating your credit score?

• Payment history and type of account

• Amounts owed and length of credit history

• Payment history and amounts owed

• Length of credit history and new credit inquiries