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GLENCOE 21.2 (Checking Accounts and Credit)

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by

michael coughlan

on 7 March 2016

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Transcript of GLENCOE 21.2 (Checking Accounts and Credit)

FORMS OF PAYMENT
TYPES OF CHECKING ACCOUNTS
REGULAR CHECKING ACCOUNT
"often requires no minimum balance"
NOW (Negotiable Order of Withdrawal) ACCOUNT
"pays interest on your deposit, but you must keep a minimum balance (usually $1,000)
Super-NOW ACCOUNT
interest rate/minimum balance required are both higher
check register
"record of your checking account transactions"
endorse
"sign your name on the back of the check in order to receive the amount on the face of the check"
RECONCILE





"to make something agree"
in a financial sense, making sure the monthly bank statement "agrees" with your check register
=
ELECTRONIC BANKING SERVICES
ELECTRONIC FUNDS TRANSFER (EFT)
"transfer of money from one bank account to another by electronic means"
savings to checking
debit card
direct deposit (payroll/taxes)
DEBIT (or ATM) CARD
can withdraw/deposit money

good for making everyday purchases

requires a password
direct deposit
"electronic transfer of payment from a company to an employee's bank account"
online banking
"allows you to manage your money from a computer with Internet access"
transfer money

access your statement

pay bills
credit
"money you can use now and pay back later"
2 MAIN TYPES OF CREDIT:
loans
credit cards
INSTALLMENT LOANS
"you receive the money as a lump sum and pay it back in regular payments"
application fee
"amount of money charged to APPLY for the loan"
down payment
"an amount of money (usually a % of the payment) paid at the time of purchase"
COLLATERAL
"assets such as the borrowers home or car"
CREDIT CARD
"small plastic card issued by a bank or other financial institution that allows the cardholder to purchase goods/services at any business that accepts the card"
CREDIT LIMIT
"maximum amount you can charge against your account"
Many businesses...
...offer "consumer charge accounts"
CREDIT
ADVANTAGES
DISADVANTAGES
easy and convenient

do not have to carry alot of cash

good for emergencies
costs of credit can be very high

may accumulate too much debt
FINANCE CHARGE
"fee based on the amount of money you owe and the interest charged on the credit"
ANNUAL PERCENTAGE RATE (APR)
"yearly cost of the loan, expressed as a percentage"
GRACE PERIOD
"a time during which interest is not charged"
debt
"state of owing money"
may not be able to make payments



may pay a large amount of interest
risk losing your collateral


credit rating may go down
CREDIT BUREAU
"agency that collects info on how promptly individuals and businesses pay their bills and repay their loans and debts"
CREDIT RATING
"numerical rating based on your credit history"
the one place you can go for a FREE credit report every 12 months is.....
USING CREDIT WISELY
shop around for best offer
use credit only when necessary
seek help through organizations such as American Consumer Credit Counseling and the Consumer Credit Counseling Service
CHECKING ACCOUNTS
Full transcript