test unit 7

Question 1

FDIC insured

Answer 1

commercial banks and credit unions

Question 2

home mortgage specialists

Answer 2

save & loan

Question 3

full service

Answer 3

commercial banks

Question 4

for profit

Answer 4

commercial banks

Question 5

non profit

Answer 5

credit unions

Question 6

wells fargo

Answer 6

commercial banks

Question 7

apple federal

Answer 7

credit union

Question 8

citizens saving and loan

Answer 8

savings and loan

Question 9

account interest may be lower

Answer 9

commercial banks

Question 10

account interest may be higher

Answer 10

credit unions and savings & loan

Question 11

loan interest rates may be lower

Answer 11

savings & loan, credit union

Question 12

fewer locations

Answer 12

credit unions

Question 13

member owned

Answer 13

credit unions

Question 14

ncua insured

Answer 14

credit unions

Question 15

higher service feeds

Answer 15

commercial banks

Question 16

bank of america

Answer 16

commercial banks

Question 17

navy federal

Answer 17

credit unions

Question 18

many locations

Answer 18

commercial banks

Question 19

capital one

Answer 19

commercial banks

Question 20

difference between fica and ncua

Answer 20

fica insures bank deposits, while the ncua insures credit union deposits

Question 21

things to do for excellent credit rating

Answer 21

paying bills on time, keeping credit card balances low, have mix of credit account types, keep accounts open for longevity

Question 22

things to do for poor credit rating

Answer 22

missed or late payments, maxing out credit cards, applying for multiple lines of credit in a short period, closing old credit accounts

Question 23

open-ended credit

Answer 23

allows borrowers to use funds up to a certain limit and repay borrowed amount over time (ex: credit card)

Question 24

close-ended credit

Answer 24

provides a fixed amount of funds upfront, requires repayment in fixed installments over set period (ex: mortgages or auto loans)

Question 25

creditworthiness characteristics ( the 5 Cs)

Answer 25

character : credit history
capacity : assesses borrower’s debt to income ratio
capital : indicates the borrower’s level of seriousness
conditions : factors like interest rate and principal
collateral : offers assurance that if the borrower doesnt pay the loan, the lender can repossess the collateral

Question 26

advantages of credit

Answer 26

convenient to make purchases and manage expenses, building credit history, emergency funds

Question 27

disadvantages of credit

Answer 27

deblt accumulation, interest charges increasing, impact on credit score with high balances or late payments

Question 28

equal credit opportunity act

Answer 28

prevents discrimination in judgement of creditworthiness

Question 29

fair credit billing act

Answer 29

creditors must resolve billing errors within a specific time period

Question 30

truth in lending act

Answer 30

requires consumers to be fully informed of the cost of credit

Question 31

fair debt collection practices act

Answer 31

designed to eliminate abusive collection practices by debt collectors

Question 32

fair credit reporting act

Answer 32

you have the right to know what is in your file and who has seen your file

Question 33

tips for reducing/avoiding unnecessary credit costs

Answer 33

pay off balances monthly, shop around for the best rates, use credit wisely and strategically

Question 34

20/10 rule

Answer 34

total debt shouldnt equal more than 20% of your annual income and monthly debt payments shouldn’t be more than 10% of your monthly income

Question 35

certificate of deposit (cds)

Answer 35

account specifies amount to be deposited and time limit for keeping it in the bank, fixed interest rates may be higher, penalty for early withdrawal

Question 36

checking account

Answer 36

account links with persons debit card such that with each swipe of the card for a purchase, amount is auto deducted from balance of the account

Question 37

check cashing company

Answer 37

business charges a fee to give a person his earned pay

Question 38

money market account

Answer 38

must make large deposit, must maintain certain balance, earns higher rate of interest than other accounts

Question 39

payday loan

Answer 39

short term borrowing where individual borrows small amount of money at very high interest rate

Question 40

savings account

Answer 40

contents of this account are liquid, enable you to get cash quickly and to transfer money into checking

Question 41

electronic services provided by banks

Answer 41

online banking : customers manage accounts, transfer funds, pay bills securely online
mobile banking : customers have access to banking services through their devices to monitor accounts, check deposits, etc.
electronic funds transfer (eft) : enables electronic movement of funds between accounts, etc.

Question 42

steps to write a check

Answer 42

write date, write place, amount of money in numbers, amount of money in letters (/100 for ending cents), write purpose for check, and sign your name

Question 43

steps to deposit money

Answer 43

write amount of cash depositing, check numbers and amounts depositing, in total add all checks and deposits up, write cash back in less cash received, in net deposit subtract cash back from total

Question 44

steps for register

Answer 44

payment/debit equals (-) and deposit/credit (+) rest is self explanatory