Owning Worksheets

1. The advantages of using a credit card are that you have time to pay back the amount you
owe at a minimum monthly payment. Also, it allows you to be able to spend money you
may not have at the moment. Many credit cards also offer rewards benefits, such as
airline miles or cash back. The disadvantages are that you are charged interest on the
balance carried on your credit card, and if you only make the minimum monthly
payment, you will end up spending more in the end due to interest. However, credit cards
are a very good way to start building credit, so that one day you can buy a house or take
out a car loan.
2. A. Credit limit: maximum amount that can be put on your card
B. Minimum monthly payment: the lowest amount you can pay back each month
C. Grace period: the time frame in which you can pay, and not be charged extra, after the
due date
D. Late fees: the amount charged if no payment is made within the grace period
E. Interest rates: the percent of interest charged for borrowing money
F. Secured credit cards: credit cards that are linked to cash balance for new borrowers or
those with poor credit score
G. Credit reports: records of your borrowing and paying habits; what is used to determine
your credit score
Activity

3. 1. True
2. True
3. True
4. False
5. False
6. True
7. True
Credit and Debit Cards: What You Need To Know
Article Questions
1. There is a difference between credit cards and debit cards. Debit cards are linked to a
checking account and automatically deduct the amount being spent from that account.
Credit cards are a line of credit you can borrow against where your balance due increases
as you spend. If not paid off in full each month, credit cards charge interest on the
balance being carried.
2. Three benefits of debit cards:

Convenient alternative to cash

Can help you budget if you use your card to pay bills and day-to-day expenses

Less likely to overspend than with credit cards

3. Overdraft protection is a feature banks offer on checking accounts that allows you to
spend more than what is available in your account balance fee.
4. Interest is the present rate of extra fees charged on a credit card or loan balance. The
interest is the cost of borrowing the money.
5. Credit card companies charge you interest to borrow their money because that is how
they make their money. The payments and fees they collect from each card holder also
allows them to continue loaning out money to new card holders.
6. The billing period is generally 15-45 days.
7. If you take longer than the billing period to pay the credit card company back, you will be
paying interest on the balance. For example, if it takes two years to pay of a $500 balance
at an 18% interest rate, you will end up paying $100 more in interest alone.
8. If a thief steals one of your debit cards and uses it to make purchases, you can call the
issuer, make a dispute claim, and the charge will be removed from your balance. It is
safer to have a credit card.
9. Some possible differences between different kinds of credit cards are the benefits or
rewards they offer, whether or not they have an annual fee, and the interest rate charged.
It is a good idea to shop around for the best one because the more you use that one card,
the more benefits/rewards you will gain from it, and different cards are better for different
people. It also makes a difference whether you plan to pay off the balance each month
worth or carry a balance.

10. A credit score is a number assigned to your credit history based on your track record of
paying back debts.
11. If you dont pay off your credit cards on time each month, your credit score will go down.
12. The key to successfully using debit and a credit card is not to spend more than you have
with either.
Activity:
1. Coach purse
2. $289.00
3. $78.00
4. 3.08 years
Short answer:
Overspending on credit cards could easily lead to debt and financial ruin because
of the interest you are charged on all purchases. In the end, it always costs more to
purchase on a credit card if you do not pay the balance off in full each month. It is
easy to be enticed by the ability to buy now and pay later. Also, the more credit you
are carrying a balance on, the lower your credit score is. The lower your credit score
is, the more difficult it is to get a home or a car loan and the interest rate the lender
offers you is higher than for someone with a higher credit score.
Student loans

1. The four ways to raise money for college:

Need-based aid

Student loans

Scholarships/grants

Work-study programs

2. Need-base aid is financial aid that you receive from the school to help cover the
cost of your tuition and fees. The amount you receive is based on your familys
estimated financial contribution, how many siblings you have attending the
school, and your personal contribution. Scholarships, on the other hand, are
awarded based on achievement and/or talent. Most require that you complete a
certain number of community service hours or submit something that you have
created, such as a piece of art work. However, many scholarships are need-based
as well and you must demonstrate need for the award funds.
3. The most common forms of student loans come from the federal government.
4. A masters degree typically cost $60,000.
5. You apply for student loans by completing the FAFSA and then you must choose
which type of student loans you want.
6. Like credit cards loans, student loans charge interest in exchange for letting you
borrow large amounts of money.

7. The two major types of student loans in the U.S. are Perkins and Stafford.
8. Loans can typically be repaid after graduation.
Car loans:
1. Auto loans, like home loans, are secured by an asset. If you take out a loan to
buy a car, the finance company will hold the tittle to your car until you pay it
off. At that point, it will sign over the title to you.
2.

Your monthly car payment is based on:

1. The price of the car

5. Licensing fees

2. Related expenses

6. The size of your down

3. Taxes

7. The interest rate

4. Tittle fees

8. The term of the loan

3. Your credit score is important in determining your interest rate on the loan
because it is an indicator of your credit payment history and lets the lender
know how likely you are to default on the loan and/or make late payments.
4. It is a good idea to shop for a loan before you go into the dealership to buy a
car because you could probably get a better interest rate from a credit union or
bank where you have a good/positive history. If you use the dealerships loans,
you have to go through their bank, who may not offer you as good a rate.
5. Always read the FINE print.

6. If you are offered 0% interest financing, the dealers will mark up the price of
the car to make up for the lost interest on the income they would normally
receive.