1. Financial Literacy Flashcards
Scams
Scams are traps to dishonestly take a person’s money.
types of scams
Charity scams
Psychic and clairvoyant scams
Computer malfunction scams
Romance scams
investment and online scams
Phishing emails
A phone call from a scammer stating there is something wrong with your account
Having your card details copied when you swipe your card
how to Avoid Being Scammed
Be suspicious -
Be cautious -
Be patient -
Be alert -
Be wise - there are very few ways that you can get rich quickly
Credit
credit refers to using money belonging to a lender to buy something now, with the understanding that the lender will be repaid in the future.
Definition of a credit card:
Issued by a financial institution, usually for an annual fee. It enables a consumer to spend up to a predetermined level. Card holders receive a monthly statement and can pay back the debt in full or part which incurs interest.
Types of credit options:
Store card - Myer, David Jones
Personal Loan - given by financial institution
Credit cards - given by financial institutions
Things to consider when getting a credit card:
Read the contract
Know the interest rates
Don’t only pay the minimum balance - try and pay all of the money owed by the due date as this will stop you from incurring interest
Have a low credit card limit
Only buy what you can afford to pay back
Avoid impulse buying - you still have to pay it back one day!
What is a Credit record?
A record of the credit history of an individual. It lists defaults a person has had in paying back their debts.
What happens if you have a bad credit score
If an individual has a bad credit file they might not be able to qualify for a credit card or home loan.
Superannuation
“super”, is compulsory for all people who have worked and reside in Australia. The balance of a person’s superannuation account, is then used to provide an income stream for retirement.
You can also make extra contributions to boost your retirement savings by arranging with your employer to make salary sacrifice contributions.
Buy Now, Pay Later.
AfterPay is an online payment method that allows you to pay for your online purchases after receiving them.
Traps of ‘Buy Now, Pay Later’
It’s easier to over spend –
Fees can add up –
It can be hard to manage
It might affect a loan application
Late repayments can appear on your credit report
Consumer Rights when purchasing goods and services
A consumer is entitled to have goods repaired, replaced or money refunded if there is a major problem with the goods or services
Identity Theft
Identity theft is a specific type of fraud, which involves stealing money or gaining other benefits by pretending that you are someone else.
