Financial Literacy: Lesson 6 Debit and Credit

What is financial literacy?

• Knowing how to spend money quickly

• Learning how to save money without spending

• Understanding and using specific skills to manage money smartly

• Understanding how to avoid using money

What is a debit card linked to?

• A savings bond

• A credit card company

• A bank account

• A loan company

What happens if you don't have money in your checking account and try to use your debit card?

• The bank will lend you money

• The transaction will be declined

• The transaction will be approved

• You will be charged a fee

Who issues a credit card?

• A government agency

• A retail store

• A credit card company or financial institution

• A bank account

What is the minimum monthly payment on a credit card?

• The least amount you can pay back each month

• The maximum amount you can pay

• The interest amount

• The total amount you owe

What happens if you pay off your credit card balance in full every month?

• You will be charged interest

• You will not be charged interest

• Your credit limit will decrease

• Your credit score will drop

How much does Frankie Finance's new bike cost?

• $350

• $150

• $500

• $70

How long will it take Frankie to pay off the bike if she only makes the minimum payment?

• 12 months

• 27 months

• 6 months

• 3 years

How much more will Frankie end up paying for the bike due to interest charges?

• $50

• $70

• $30

• $100

What should you consider when choosing between using a debit card and a credit card?

• The card's expiration date

• The card's design

• The interest rate and your current bank balance

• The color of the card