Banking and Financial Literacy Flashcard

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What is a money order?

Back

A money order is a payment order for a pre-specified amount of money, which can be used as a secure way to send money without needing a bank account.

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What is liquidity in finance?

Back

Liquidity refers to how easily an asset can be converted into cash without affecting its market price.

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What is the difference between a debit card and a credit card?

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Debit cards allow you to spend money that you already have in your bank account, while credit cards allow you to borrow money up to a certain limit.

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What happens if you write a check for more than your account balance?

Back

If you write a check for more than your account balance and have no overdraft protection, the bank will likely return the check due to insufficient funds and may charge a fee.

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What is a stop payment on a check?

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A stop payment is a request to cancel a check that has not yet been cashed, preventing it from being processed.

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What are assets?

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Assets are resources owned by an individual or entity that have economic value and can provide future benefits.

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What is the safest method of receiving payment when selling to an unknown person?

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A money order is considered the safest method of receiving payment when selling to an unknown person.

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What is a checking account?

Back

A checking account is a type of bank account that allows for deposits and withdrawals, typically used for daily transactions.

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What is overdraft protection?

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Overdraft protection is a service provided by banks that allows an account holder to withdraw more money than is available in their account, up to a certain limit.

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What is a personal check?

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A personal check is a written order directing a bank to pay a specific amount of money from the writer's account to the person named on the check.