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Jeopardy Jeopardy P.F. 5: P.F. 5: Credit Cards Credit Cards and and Bankruptcy Bankruptcy

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Page 1: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

JeopardyJeopardy

P.F. 5: Credit Cards P.F. 5: Credit Cards and Bankruptcyand Bankruptcy

Page 2: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 3: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

Category 1100100

Another term for the borrower of money, goods, Another term for the borrower of money, goods, etc. etc.

. . .. . .

DebtorDebtor

Page 4: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 5: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 6: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

Category 1400400

The lender of money, goods, etc. The lender of money, goods, etc.

. . .. . .

CreditorCreditor

Page 7: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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)

Page 8: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 9: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 10: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

Category 2Category 2300300

The original sum invested or loaned is The original sum invested or loaned is known as the…known as the…

. . .. . .

principalprincipal

Page 11: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 12: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 13: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 14: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 15: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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.

Page 16: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 17: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 18: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 19: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 20: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 21: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 22: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 23: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 24: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

Category 5 Category 5

200200What is it called when you miss payments? What is it called when you miss payments?

. . .. . .

DefaultDefault

Page 25: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 26: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 27: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 28: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 29: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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.

Page 30: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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

Page 31: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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.

Page 32: Jeopardy P.F. 5: Credit Cards and Bankruptcy. Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 100 200 300 400 500

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