Financial Literacy Flashcards
Financial Institution
a company that focuses on dealing with financial transactions, such as investments, loans, and deposits. Examples are banks and credit unions
Deposit*
A transaction is which a sum of money is put into a bank account by the account owner
Transfer*
Moving money between accounts that are owned by the same account owner
Credit Card*
A plastic payment card that allows users to make purchases. There may be a credit limit which is the maximum amount the user can borrow. These purchases do not come out of the checking account directly. The credit card owner pays the credit card company back monthly.
Debit Card*
A plastic payment card that allows users to make purchases. When this card is used, the money is automatically deducted from the owners financial account (checking account)
Check register*
A document used to record fees, deposits, withdrawals, and other financial transactions.
Withdrawal*
A transaction in which money is taken from a bank account by the account owner
Checking Account*
A bank account that customers use for financial transactions such as making withdrawals or deposits. Owners write checks to use as money.
Saving Account*
A bank account that customers use to save money. Financial institutions will pay the customer as small amount of interest for keeping their money in this account
Bankruptcy
When a person or company has spent more than they earn. They cannot pay their debts. They will have a review of their debts and a plan is made for the owner to repay as much as they can.
Fee
A payment for services such as providing checks, or a payment as a consequence of not following the rules. Ex. writing a bad check
Borrow
The act of getting money from a financial institution with plans to repay the money
Credit Report
A report containing detailed information on a person’s credit history which is how well they pay back a loan. Borrowers with a good credit history will have a good report and thus be able to borrow money when needed. Lenders use the report to evaluate whether or not to lend money to customers.
Loan
a sum of money given by a financial institution that is expected to be paid back with interest.
Interest
A charge for the use of money. Customers pay interest to financial institutions for loans because they are using the institution’s money. Customers are paid interest by financial institutions for keeping their money in the financial institution.
