Financial Literacy and Emergency Funds

The video discusses the financial challenges faced by Americans, particularly in covering unexpected expenses. It explores various non-cash options such as selling items or borrowing from friends, and institutional lending options like bank loans, credit cards, and payday loans. The video also highlights the benefits of Digital Credit Union and provides a cost analysis of these financial options, emphasizing the importance of starting an emergency fund.

What percentage of Americans could not cover a $500 expense out of pocket according to a 2022 survey?

• 33%

• 50%

• 25%

• 75%

Which of the following is a non-cash option that does not require credit checks?

• Credit card

• Payday loan

• Bank loan

• Selling an item

What is a common requirement for obtaining a bank loan?

• No income proof

• Immediate approval

• High credit score

• No credit history

What is a potential downside of using a credit card for unexpected expenses?

• No interest charges

• No minimum payment

• Fixed monthly payments

• Interest on interest

Which option is known for having exceptionally high interest rates?

• Payday loan

• Overdraft

• Credit card

• Bank loan

What is a typical fee associated with overdrafts?

• $10

• $20

• $35

• $50

Why are payday loans considered predatory?

• No fees

• Debt spiral potential

• Short repayment period

• Low interest rates

What is a benefit of borrowing from friends or family?

• Immediate approval

• Collateral required

• No interest charges

• High interest rates

What is a key reason for starting an emergency fund?

• To rely on payday loans

• To increase debt

• To avoid financial pitfalls

• To pay more interest

What percentage of Americans might need to rely on non-cash options for unexpected expenses?

• 32%

• 20%

• 10%

• 50%