Personal Finance IV – Understand Debit Cards and Credit Cards
As we mentioned in previous article, Consumer loans refers to people borrow money to make a wide range of secured and unsecure loans to consumers for consumable items from lending institution. Beside consumer loans, debit cards and credit cards also play an important role in consumer daily purchase.
I. Debit cards
1) First of all Debit cards are not used for credit, it is your money deposited in your bank, trust or credit union checking account.
2) A debit card allows the user to have purchases immediately deducted from his or her regular checking account.
3) Debit cards are also used as access to automatic ATM machines.
4) With debit cards, you don’t have to use checks or cash. All purchases are transacted electronically.
II. Credit cards
1) Charge Cards
a) Charge cards is a form of short-term credit issued by the bank or trust for borrower for purchasing.
b) Charge accounts requiring full payment within a specific grace period. usually 30 days.
2) Credit cards
a) Credit cards is a revolving loans.It offers the card holders to continue charging purchases to an account, as long as a portion of the bill is paid each month.
b) There are 2 major types of credit cards are bank cards and department store cards.
i) The grace period on bank cards is 21 days.
ii) The grace period on department store cards is 21-30 days.
c) Cash advances are allowed with credit cards issued by financial institutions.
d) It is your responsibility to immediately report the loss or theft of your card to the respective bank, trust company, or credit union.
e) All banks limit the card holder’s liability to $50 after notification.
f) Bank credit cards charge interest rate between 17-19% while the department store cards charge interest rate between 26-28%.
g) Interests are calculated on the daily outstanding balance, while retailers charge a monthly interest rate.
III. Credit card payments
After receiving the credit card statement, you may pay off the balance in full without interest, or you may make a partial payment and start to pay interest.
If you make a partial payment, there are 3 types of concurrent interest rates are charged
1) from the date the credit card office posted the transaction to the next statement date.
2) From one statement date to the next.
3) From the second statement date to the payment date.
I hope this information will help. If you need more information of health advices or series of articles of the above subject at my home page at:
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Kyle J. Norton
Help!! personal finance questions?
1. What is defaulting? (Select the best answer.) (Points : 1)
Failing to pay debts
Opening too many credit accounts
Getting a low credit score
Building a credit history
2. What is revolving credit? (Select the best answer.) (Points : 1)
Credit when the borrower makes regular monthly payments
Credit that requires payment in full on a specific date
Credit that is paid all at once, in a single payment
Credit that lets the borrower choose how much of the credit to use and when to pay it
3. Which of the following is not part of the process of establishing credit? (Select the best answer.) (Points : 1)
Opening a bank account
Getting a credit card
Taking out a loan
Using a credit card regularly
4. What is financing? (Select the best answer.) (Points : 1)
Paying back debts
Using credit to pay for purchases
Reducing the principal of a loan
Using a debit card to make purchases
5. What is collateral? (Select the best answer.) (Points : 1)
A finance charge
A specific type of home loan
An asset or group of assets that are linked to a loan
A down payment
6. Which of the following credit scores is a normal credit score? (Select the best answer.) (Points : 1)
400
500
650
775
7. Which of the following is not a part of your credit report? (Select the best answer.) (Points : 1)
The number of inquiries banks have made about your credit
The address of your current house or apartment
The balance in your bank account
The number of times you have filed for bankruptcy
8. What might you do if you are unable to get a credit card? (Select the best answer.) (Points : 1)
Make as many cash purchases as possible
Apply for a department store card
Stop accepting government assistance
Pay less attention to your bank balance
9. What is co-signing? (Select the best answer.) (Points : 1)
Requesting multiple credit histories
Opening two lines of credit at the same time
Sharing responsibility for a debt with another person
Allowing someone else to be completely responsible for your debt
10. What does a credit counselor do? (Select the best answer.) (Points : 1)
Co-signs a loan with you
Helps you make a plan to resolve financial issues
Convinces your creditors to reduce your debt
Collects debts
11. What is a means exam? (Select the best answer.) (Points : 1)
A document stating you don’t need to pay certain debts
An application for a loan
A survey about your income, expenses, and assets
A plan for paying your creditors
12. What is a down payment? (Select the best answer.) (Points : 1)
The first payment a borrower makes on the principal of a loan
A cash payment made by the borrower of a percentage of the total cost of the asset
An interest rate charged on a credit card
A fee paid to process a loan application
13. Which of the following is a part of applying for a loan? (Select the best answer.) (Points : 1)
Verifying your income
Negotiating an interest rate
Signing up for a credit card
Completing a means exam
14. A loan that is linked to an asset is called ___________. (Select the best answer.) (Points : 1)
An unsecured loan
A secured loan
A linked loan
An asset loan
15. Which of the following is a way to use credit responsibly? (Select the best answer.) (Points : 1)
Opening several different credit accounts
Paying only the minimum payment each month
Understanding the account’s interest rate
Paying attention to the APR and not the APY
dude roland what are you talking about??
Don’t trust any bank all this words to get interest and eat the wool on your back and a part of your paybill !
Use them less as possible :
ask for you rmoney CASH at the bank I fired my bank in France and guess what:they said you have the risk to be stolen and I answered the grand thief don’t work in th estreet but here in this building!
References :
I’m talking about the real job of bankers!Please read letter from treasure secretary Gallatin to Pdt Jefferson! To day we understand better!