Unit 2 Flashcards
and maybe 3 idk
Co-signer
a person who agrees to pay another’s debt
Consideration
something of value exchanged for another thing of value
Contractual Capacity
legal competence of anyone entering a binding agreement
Certified Check
check that is guaranteed to have sufficient funding
Casher’s Check
written from the bank, you pay the bank first and they write a check
Bouncing a check
a check that cannot be processed because the account holder has non-sufficient funds
Floating a check
writing a check and hoping to get the funds before it’s cleared (ILLEGAL)
Postdating a check
writing a future date on a check so the guy can’t cash it in until that date (BAD)
checking account benefits
easy access, allows you to write checks to make payment, builds interest
Simple v Compound Interest
Simple - interest rate stays the same
Compount - interest rate increases
CD vs Savings Account
the money must be left in the CD until a specified date, CD have a higher APY than Savings
FDIC Protection
protects you against the loss of your insured deposits if an insured bank fail, of at least $250,000
Finance Charge
fee representing the cost of credit
Minimum Payment
the smallest amount you can pay each month to avoid late fees
Open v Closed-end Credit
Closed - credit is taken out once, and has a specific repayment date
Open - can be drawn from again and again, and there’s no fixed due date
