FM sem 1 pretest-posttest

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

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

Each of the following is a way to access money in your checking account EXCEPT...

• Take out cash using your debit card at an ATM machine
• Use your debit card to pay for groceries at a Point-of-Sale (POS) terminal
• Write a check to pay the rent on your apartment
• Swipe a prepaid card to pay for your fast food purchase

Nathan lives in a large apartment complex, and his rent is due by the first of each month to “Martin Rental Properties, LLC” which has its office 45-minutes away in downtown Lansing. Which payment option makes the most sense if he is trying to be responsible and efficient with his time?

• Hand-deliver cash
• Set up a text alert reminder to write and mail a check by the 28th of the previous month
• Ask his employer to set up direct deposit
• Use online auto bill pay

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

• Mailing a check today
• Using your debit card to pay for groceries at Target
• Using your credit card to pay for your school books
• Depositing a check at a local bank branch

When signing up for a new checking account you answer "Yes" to receive overdraft protection. On this day, you have $10 in your account. You go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?

• Your account would be closed
• You will likely be charged an overdraft fee for EACH transaction and also will need to repay the bank for the amount overdrawn ($29)
• Because you requested overdraft protection, the bank will not allow you to overdraw your account, so your debit card will be denied in these 3 instances
• The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed

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

You find three receipts from your activities today: (1) ATM withdrawal of $60 plus $3 out-of-network ATM fee, (2) Debit card used for grocery bill of $34 plus cash back of $20, and (3) ATM deposit of $90 from birthday checks. What is your current balance if you started the day with $300 in your account?

• $273
• $333
• $83
• $300, because banks don't process any same-day transactions

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