SAHS FINAL REVIEW

CREDIT/BANKING ADVANTAGES

• Able to purchase expensive items earlier.
• Convenient
• Eliminate the need to carry large amounts of cash
• Useful for emergencies
• Often required to hold a reservation

CREDIT/BANKING DISADVANTAGES

• Additional fees are common
• Tempting to overspend
• Can cause large amounts of debt
• Paying interest
• Responsible for lost/stolen credit cards
• Identity theft is easier

CREDIT CARDS

• When a bank lends an individual money and trusts they will pay it back. (Credit)
• The minimum amount of a credit card bill that must be paid (minimum payment)
• The date payment is due (due date)
• A fee charged when a cardholder does not make the minimum payment by the due date (late payment fee)
• The maximum amount of money that can be charged to a credit card (credit line)

CREDIT CARDS CONTINUED

• A debit card is: plastic card that is electronically connected to an individual's bank account. Money is automatically withdrawn from the bank account, have to have pin to confirm and authorized access.
• The correct way to fill out the "pay to order of" line for the amount $101.78 is: One hundred one and 78/100-------------------------------------$101.78
• What color pen should be used when writing checks? Black or blue
• Sam noticed a wallet on the mall floor, she should turn it all into mall security

CREDIT CARDS CONTINUED

• Lindsay realized that she lost her credit card and does not have any of the information, she could call her financial institution and report the loss, go online and get the 1-800 number to report it lost, refer to an old statement for information and report it.
• If you have a credit card in your wallet that you don't use anymore, you could call and cancel it.
• Always check credit card statement to make sure there are no false purchases on the account.

CREDIT CARDS CONTINUED

• Sign card with signature and please see ID
• Develop a habit of tearing up any credit card offers or credit cards received in the mail
• Report lost or stolen credit cards promptly

CREDIT/BANKING

• Your credit rating may be checked when you try to rent an apartment-true
• A "store credit card" is a credit card that can only be used at one company's stores and its affiliates-true
• Most people in their late teens and early twenties have credit cards-true
• The number of people in their late teens and early twenties with credit problems has decreased in recent years-false
• If you pay the "minimum payment amount" each month, you will pay off your credit card balance in a reasonable amount of time-false

CREDIT/BANKING CONTINUED

• Using your credit card to get cash advances makes good economic sense-false, makes bad economic sense
• A "balance transfer" is where you pay off one credit card by transferring your balance to another credit card-true
• If your credit card has a high interest rate, don't waste your time asking them to reduce the rate, because credit card companies would never agree to cut your interest rate-false, do call to ask them to lower the rate, they'll compromise
• If a credit card company gives you a very low interest rate, the company cannot raise that rate for at least two years-false, they can raise it if notified.

HOUSING

• Rent is defined as the cost of using someone else's property.
• A security deposit is defined as an advance payment for costs beyond normal housing wear and tear
• The maximum amount an individual should pay for a home is - 2.5 times his/her annual household income
• Who is the tenant- the person renting the place to live
• Eviction occurs when the tenant voluntarily moves out after the landlord has given required notice to the tenant-false, they are forced out

HOUSING CONTINUED

• Amenities in a living space include water, garbage, electricity, heat, telephone and Internet service, television-true
• Renters insurance can protect against fire, theft, and vandalism-true
• An application form is a document used to determine if a person's credit history, financial stability, and references make them a worthy candidate-true
• Housing is the most expensive expense-true
• Expenses are what you spend money on like rent/mortgage-true

INSURANCE ESSENTIALS

• Deductible- the amount paid out of pocket for the initial portion of a loss before the insurance coverage begins.
• Risk-the uncertainty about a situations outcome
• Policy- a contract between the individual and the insurer specifying the terms of the insurance arrangements.
• Policyholder- the consumer who purchased the policy
• Insurance- the arrangement between the individual and the insurer to protect the company against risk.
• Homeowners/renters insurance- combines property and liability insurance into one policy to protect from damage costs due to perils.

INSURANCE ESSENTIALS CONITNUED

• Life insurance- is a contract between an insurer and policy holder specifying a sum to be paid to beneficiary upon the insured' death.
• Disability insurance- replaces a position of ones income if they become unable to work due to illness or injury.
• Health insurance- provides protection against financial losses resulting from injury, illness, and disability.
• Automobile insurance- arrangement between the individual and an insurer to protect the individual against risk from car accidents.

BANKING/DEPOSITORY INSTITUTIONS

• Commercial bank- full service institutions because they offer a wide variety of services
• Risk of loss- a term that is used to determine which party should be responsible for damage occurring to producers after a service transaction has been completed, but prior to delivery.
• Interest- the amount of money that is either gained or lost when accessing services offered by a depository institution.
• Federal Reserve Bank- part of the central banking system in the United States.
• Depository institutions- business which offers multiple services in banking and finance.

BANKING/DEPOSITORY INSTITUTIONS CONTINUED

• Credit Union- nonprofit cooperative institutions owned by their members
• Interest rate- the percentage used annually to calculate the total interest gained or lost from an account supplied by depository institution.
• FDIC- a federal government agency which insures federal chartered banks and savings and loans against loss
• Savings and Loan Association- Primary focus is providing loans and mortgages to customers.
• NCUA- provides insurance protection for credit unions just like FDIC for Banks

BANKING/DEPOSITORY INSTITUTIONS

• Mortgage-loan for a home
• Savings account- designed so that money typically is deposited to earn interest
• Stock- ownership, represented by shares in a corporation.
• Loan- money is borrowed and paid back to the bank with interest

DEPOSITORY INSTITUTIONS

• Most common type of depository institution is a commercial bank
• People use a checking account for covenience, written record of expenses, and no need to carry large amounts of cash
• Depositor at commercial bank is insured for $250,000
• A typical bank offers financial counseling, checking accounts and loans

DEPOSITORY INSTITUTIONS CONTINUED

• At an ATM you can cash withdrawals, deposits, account balance info
• Banking from home can be performed by using a touch tone phone and computer
• To use ATM and debit cards safely, the consumer should sign back of the card and write please see ID, keep PIN stored away from card, keep your receipts and never give out PIN

DEPOSITORY INSTITUTIONS CONTINUED

• Direct deposits and direct payments- direct deposit allows pay and benefit checks to be directly deposited into a specified account in a paperless form. Direct payment authorizes bills to be paid by a specified account without having to write a check. Authorization forms must be signed by the account holder to allow a transaction, therefore being unsafe. Direct deposit can help prevent check fraud.