Banking Services Flashcards
Types of Banking services
Loans, Lines of Credit, Credit Cards, Direct Deposits, Money Orders, Overdraft Protection, Preauthorized Bill Payments, Safety Deposit Box
What is a Loan
When a bank or credit union lends you money
True or False loans are usually used to purchase high ticket items
True
Do you have to apply for a loan
Yes
what does a bank look at when you ask for a loan
Do you have a previous loan and did you pay it back, how much money you make, how much money you already owe, do you have anything of value
Do banks charge intrest for loans
yes
What is a line of credit
it is access to a lump sum of money that you can use whenever you want
what do you pay intrest on in a line of credit
only the money you use
what is the average intrest on a line of credit
6%-10%
Do you have to apply for a line of credit
yes
what are credit cards
similar to lines of credit but easier to access, they have a certain limit
how does interest work with credit cards
you are allowed to pay the money back within a certain time frame with no interest, otherwise interest will be charged on the amount you spent
what is the average interest on credit cards
22%
do credit cards have a higher interest rate than lines of credit
yes
what is direct deposits
a service provided by the bank so that companies can deposit their employees paycheque directly in their bank account
why is direct deposits more commonly used for full time employees
because their paycheque is usually the same amount every time
what is a money order
a way for money to be sent when you can’t send cash
when can a money order be helpful
when sending money to foreign countries since they use their own type of currency
How do you send a money order and what does it look like
go to a bank and pay with cash or your debit card and the bank will produce your money order, they are pieces of paper that look similar to cheques
what does a money order have on it
a specific person or business name, a specific amount listed
why are mone orders less risk sending in the mail
they can only be cashed in be the name on the order
what is overdraft protection
lets you take out money even if you dont have enough in your bank account
What is the usual amount you can go over in overdraft protection
The usual amount is two hundred dollars
When do you Have to pay for overdraft protection
You will either have to pay a monthly fee or A charge every time you use it
