Debit, Savings, Credit

What is the main purpose of a debit card?

• Booking flights

• Sending emails

• Ordering groceries

• Accessing funds in a bank account electronically

How does a savings account differ from a checking account?

• A savings account offers lower interest rates and no limits on withdrawals, while a checking account is for infrequent transactions and offers interest.

• A savings account is used for frequent transactions and does not offer interest, while a checking account is for saving money and offers high interest rates.

• A savings account has no interest rates and unlimited withdrawals, while a checking account has high interest rates and limits on withdrawals.

• A savings account offers higher interest rates and limits on withdrawals, while a checking account is for frequent transactions and does not offer interest.

What is the concept of interest in relation to credit cards?

• Interest on credit cards is a fixed monthly fee.

• Interest on credit cards is a reward for timely payments.

• Interest on credit cards is waived for the first year.

• Interest on credit cards is the cost of borrowing money and is charged as a percentage of the outstanding balance.

Explain the term 'credit limit' in the context of credit cards.

• The credit limit is the interest rate charged on overdue balances.

• The credit limit is the maximum amount of money a credit card company allows a cardholder to borrow on a single card.

• The credit limit is the number of rewards points earned per transaction.

• The credit limit is the minimum amount required to be paid each month.

What are the advantages of using a debit card for transactions?

• Limited acceptance

• No purchase protection

• High interest rates

• Convenience, security, budget control, no interest charges

How does compound interest work in a savings account?

• Interest is only earned on the initial deposit

• Interest is earned on the initial deposit as well as on the interest that has been previously added to the account.

• Interest is calculated based on the account holder's age

• Interest is added to the account monthly instead of compounding

What are the potential risks of using a credit card?

• Low interest rates

• Enhanced credit score

• No risk of overspending

• High interest rates, overspending, identity theft, fraud, damaging credit score

What is the importance of maintaining a good credit score?

• It is only important for buying a house

• It affects loan approvals, interest rates, insurance premiums, rental applications, and job opportunities.

• It has no impact on financial decisions

• It only affects job opportunities

How can one build a healthy savings habit?

• By spending all income immediately

• By avoiding setting any financial goals

• By setting specific goals, creating a budget, automating transfers, avoiding unnecessary expenses, and reviewing the plan regularly.

• By never reviewing or adjusting the budget

What are some common fees associated with debit, savings, and credit accounts?

• Overdraft fees, monthly maintenance fees, ATM fees, minimum balance fees, foreign transaction fees

• Late payment fees

• Account opening fees

• Transfer fees