Unit 3 Vocab

Question 1

A yearly fee that may be charged for having a specific credit card, independent of how you use the card

Answer 1

Annual Fee

Question 2

Automatic Teller Machine. Allows a person to manage a bank account holder’s funds through actions such as withdrawing or depositing money, viewing account balances, etc.

Answer 2

ATM

Question 3

The cost you pay each year to borrow money, including fees, expressed as a percentage

Answer 3

APR

Question 4

A monthly document prepared by your financial institution which shows all of the transactions related to your account

Answer 4

Bank Statement

Question 5

A legal proceeding carried out to allow individuals or businesses freedom from their debts, while simultaneously providing creditors an opportunity for repayment

Answer 5

Bankruptcy

Question 6

A bank product that earns interest on a lump-sum deposit that’s untouched for a predetermined period of time

Answer 6

Certificate of Deposit (CD)

Question 7

A written, dated, and signed order to the bank that tells it to pay a definite sum of money to a payee

Answer 7

Check

Question 8

An account held at a financial institution that allows deposits and withdrawals

Answer 8

Checking Account

Question 9

Something valuable that the lender can take as payment if you can’t or don’t repay your secured loan

Answer 9

Collateral

Question 10

Reinvesting earned interest back into the principal to allow money to grow exponentially over time

Answer 10

Compound Interest

Question 11

A consumer-reporting company that collects and sells information about how individual people manage their credit (e.g Equifax)

Answer 11

Credit Bureau

Question 12

A card that allows the holder to make purchases without cash by borrowing money

Answer 12

Credit Card

Question 13

A record of a person’s use of credit over time; 15% of your credit score is based on the length of your credit history

Answer 13

Credit History

Question 14

The maximum amount that may be borrowed on a credit card

Answer 14

Credit Limit

Question 15

A three-digit number (ranging from 300-850) based on an individual’s credit history detailed in a credit report

Answer 15

Credit Score

Question 16

A card that is directly connected to your checking account; it enables you to conduct ATM transactions and to make purchases instead of using cash or writing a check

Answer 16

Debit Card

Question 17

A method of debt repayment whereby the borrower prioritizes paying down debts with the highest interest rates first

Answer 17

Debt Avalanche Method

Question 18

A method of debt repayment whereby the borrower prioritizes paying down debts with the smallest balances first

Answer 18

Debt Snowball Method

Question 19

An automatic electronic deposit of net pay to an employee’s designated bank account

Answer 19

Direct Deposit

Question 20

Money set aside for unanticipated expenses or loss of income

Answer 20

Emergency Fund

Question 21

Protection provided by the Federal Deposit Insurance Corporation; protects the deposits of customers against loss up to $250,000 per account

Answer 21

FDIC Insurance

Question 22

An inquiry into your credit history, typically in advance of applying for a loan.

Answer 22

Hard Inquiry

Question 23

A monthly fee that some banks charge to provide access to checking or savings accounts

Answer 23

Maintenance Fee

Question 24

A certain amount of money that must be kept in an account as required by that particular financial institution

Answer 24

Minimum Balance

Question 25

The smallest amount of a credit card bill that a credit card holder must pay during a billing cycle to remain in good standing with the lender

Answer 25

Minimum Payment

Question 26

A type of savings account that may allow debit card and check writing privileges

Answer 26

Money Market Account

Question 27

An interest-bearing deposit account held at a bank or other financial institution

Answer 27

Savings Account

Question 28

A loan banks offer to their customers when they try to withdraw more funds than they have in their account, usually for a fee and with interest

Answer 28

Overdraft Protection

Question 29

An inquiry into your credit history as part of a background check. This does not affect your credit score.

Answer 29

Soft Inquiry

Question 30

A standard table that legally must appear in a credit card agreement showing basic information about the card’s rates and fees

Answer 30

Schumer Box

Question 31

Interest paid on the principal alone

Answer 31

Simple Interest

Question 32

A term used to describe someone with little to no credit history

Answer 32

Thin File

Question 33

A notification that lets you know when there is suspicious activity with your account

Answer 33

Unusual Activity Alert