Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5...
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Transcript of Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5...
JeopardyJeopardy
P.F. 5: Credit Cards P.F. 5: Credit Cards and Bankruptcyand Bankruptcy
Category 1
Category 2
Category 3
Category 4
Category 5
Category 6
100 100 100 100 100 100
200 200 200 200 200 200
300 300 300 300 300 300
400 400 400 400 400 400
500 500 500 500 500 500
Category 1100100
Another term for the borrower of money, goods, Another term for the borrower of money, goods, etc. etc.
. . .. . .
DebtorDebtor
Category 1 200200
The amount of monetary resources a The amount of monetary resources a potential buyer has available (e.g. stock)potential buyer has available (e.g. stock)
. . .. . .
capitalcapital
Category 1300300
An asset (e.g. car) or piece of property that An asset (e.g. car) or piece of property that a person uses when taking out a loan, a person uses when taking out a loan,
promising to give that asset to the lender promising to give that asset to the lender if the borrower defaults on payments. if the borrower defaults on payments.
. . .. . .
CollateralCollateral
Category 1400400
The lender of money, goods, etc. The lender of money, goods, etc.
. . .. . .
CreditorCreditor
Category 1500500
This rate shows the total cost of credit This rate shows the total cost of credit annually. It includes interest rates and annually. It includes interest rates and
other costs (e.g. service costs)other costs (e.g. service costs)
. . .. . .
APR (Annual Percentage Rate) APR (Annual Percentage Rate)
Category 2Category 2100100
The price that someone pays for the The price that someone pays for the temporary use of someone else’s funds. temporary use of someone else’s funds.
. . .. . .
InterestInterest
Category 2Category 2200200
Fraudulent or discriminatory lending Fraudulent or discriminatory lending practices designed to exploit vulnerable practices designed to exploit vulnerable borrowers (e.g. disguised fees for home borrowers (e.g. disguised fees for home
mortgages)mortgages)
. . .. . .
Predatory lendingPredatory lending
Category 2Category 2300300
The original sum invested or loaned is The original sum invested or loaned is known as the…known as the…
. . .. . .
principalprincipal
Category 2 Category 2 400400
What are the 3 credit bureaus that compile What are the 3 credit bureaus that compile people’s credit scores? people’s credit scores?
. . .. . .
Trans Union, Equifax, and ExperianTrans Union, Equifax, and Experian
Category 2 Category 2 500500
What does paying more than the minimum What does paying more than the minimum payment on credit cards do? payment on credit cards do?
. . .. . .
Lower interest rates; lower overall long-Lower interest rates; lower overall long-term balanceterm balance
Category 3 Category 3 100100
Approx. what is the range of credit scores Approx. what is the range of credit scores that will lead to lower interest rates? that will lead to lower interest rates?
700-850700-850
Category 3 Category 3 200200
What is the purpose of a credit score?What is the purpose of a credit score?
. . .. . .
Show lenders the risk of Show lenders the risk of defaultdefault according according to the person’s credit historyto the person’s credit history
Category 3 Category 3 300300
Name two entities that check your credit Name two entities that check your credit scores? scores?
. . .. . .
Banks, credit card companies, employers, Banks, credit card companies, employers, landlords, etc. landlords, etc.
Category 3 Category 3 400400
What does it mean for a business to file a What does it mean for a business to file a Chapter 7 Bankruptcy? Chapter 7 Bankruptcy?
. . .. . .
Most severe- they liquidate their assets and Most severe- they liquidate their assets and go out of businessgo out of business
Category 3 Category 3 500500
What does it mean for a business to file a What does it mean for a business to file a Chapter 11 Bankruptcy? Chapter 11 Bankruptcy?
. . .. . .
They are holding out hope of staying in They are holding out hope of staying in business by proposing a financial plan to business by proposing a financial plan to
creditorscreditors
Category 4Category 4 100100
What does it mean for an individual to file What does it mean for an individual to file a Chapter 13 Bankruptcy?a Chapter 13 Bankruptcy?
. . .. . .
The debtor adheres to a payment schedule The debtor adheres to a payment schedule to repay outstanding debtsto repay outstanding debts
Category 4Category 4 200200
Term for selling a company’s assets, paying Term for selling a company’s assets, paying outstanding debts, and distributing outstanding debts, and distributing
income to shareholders- then go out of income to shareholders- then go out of business business
. . .. . .
LiquidationLiquidation
Category 4Category 4 300300
Approximately how much credit card debt Approximately how much credit card debt do college students have on average upon do college students have on average upon
graduation? graduation?
. . .. . .
Over $4,000Over $4,000
Category 4Category 4 400400
What do the 3 credit bureaus do? What do the 3 credit bureaus do?
. . .. . .
Compile people’s credit scoresCompile people’s credit scores
Category 4Category 4 500500
Interest paid on both the principal and on Interest paid on both the principal and on accrued interestaccrued interest
. . .. . .
Compound InterestCompound Interest
Category 5Category 5
100100Calculated as a percentage of the principal Calculated as a percentage of the principal
over a certain period; not compoundedover a certain period; not compounded
. . .. . .
Simple InterestSimple Interest
Category 5 Category 5
200200What is it called when you miss payments? What is it called when you miss payments?
. . .. . .
DefaultDefault
Category 5 Category 5
300300How, over time, can you build a good credit How, over time, can you build a good credit
score? score?
. . .. . .
Pay credit cards on time and in full; pay bills and Pay credit cards on time and in full; pay bills and rent on time; don’t spend over 30% of credit rent on time; don’t spend over 30% of credit
limit; savings or checking account; TIMElimit; savings or checking account; TIME
Category 5 Category 5
400400What can you gain as a result of building a What can you gain as a result of building a
high credit score? high credit score?
. . .. . .
One can receive loans of choice, as well as One can receive loans of choice, as well as earn lower interest ratesearn lower interest rates
Category 5 Category 5
500500
Credit scores are also known as ______ Credit scores are also known as ______ scores (hint: it’s an acronym)scores (hint: it’s an acronym)
. . .. . .
FICO scoresFICO scores
Category 6Category 6100100
+/- 1 year, how long (max) can negative +/- 1 year, how long (max) can negative credit stay on your record for? credit stay on your record for?
. . .. . .
7 years 7 years
Category 6Category 6200200
Name two companies that have filed Name two companies that have filed Chapter 7 Bankruptcy in recent years? Chapter 7 Bankruptcy in recent years?
. . .. . .
Lehman Bros Bank, Circuit City, Lehman Bros Bank, Circuit City, Mervyn’s, Sharper Image, Enron, World Mervyn’s, Sharper Image, Enron, World
Com, etc. Com, etc.
Category 6Category 6300300
How long do bankruptcies affect a person’s How long do bankruptcies affect a person’s credit score?credit score?
. . .. . .
10 years10 years
Category 6Category 6400400
Name at least 3 companies or individuals Name at least 3 companies or individuals who have claimed Chapter 11 who have claimed Chapter 11
bankruptcybankruptcy. . .. . .
PG&E, U.S. Airways, Donald Trump, Abe PG&E, U.S. Airways, Donald Trump, Abe Lincoln, Henry Ford, Michael Vick, GM, Lincoln, Henry Ford, Michael Vick, GM,
Chrysler, Walt Disney, etc. Chrysler, Walt Disney, etc.
Category 6Category 6500500
+/- $100 billion, what is the current (2012) +/- $100 billion, what is the current (2012) total credit card debt in the United total credit card debt in the United
States?States?
. . .. . .
$858 billion $858 billion