Credit Flashcards
What is income?
The money you earn form your job, wages salary or pocket money
What is expenditure?
Outgoing money spent, such as tax bills or medical costs
What is plastic money?
The hard, plastic cards used in place of actual bank notes, such as credit or debit cards
What is a budget?
An estimate of income and expenditure for a set period of time
When does a surplus budget occur?
When your income is greater than your spending on needs and wants, leading to saving
When does a deficit budget occur?
When your spending is greater than your income
When does a balanced budget occur?
When your spending is the same as your income
What is credit?
A contractual agreement in which a borrower receives something of value and agrees to repay the lender at a later date, usually with interest
What are the advantages of credit cards?
They can help out in financial emergencies and allow you to buy things now and pay later
What do credit cards do?
Charge usage to your line of credit and allow you to buy first and pay later
What are the disadvantages of credit cards?
It usually costs more than paying cash as interest and other charges may be added to the purchase price and debt can be incurred
What does a debit card do?
Accesses funds for you bank account using your own money
What are the advantages of debit cards?
They do not allow you to incur any debt as you can only spend as much as you have in your bank account, unlike credit cards which can incur debt and additional interest charges
What does EFTPOS stand for?
Electronic funds transfer at point of sale
What does EFTPOS do?
Reduces the amount of cash you have to carry and use
