Read the notes, then try the practice. It adapts as you go.When you're ready.
Session Length
~18 min
Adaptive Checks
16 questions
Transfer Probes
9
Banking, credit, and debt form the backbone of personal financial management in the modern economy. Understanding how banking institutions work -- from checking and savings accounts to certificates of deposit and money market accounts -- is essential for managing money effectively. The FDIC insures deposits up to $250,000 per depositor per bank.
Credit is the ability to borrow money with the understanding that payment will be made later. The FICO credit score (300-850) is calculated from five factors: payment history (35%), amounts owed (30%), length of credit history (15%), new credit inquiries (10%), and credit mix (10%).
Debt management is a critical skill. Not all debt is equal: a mortgage or student loan at a low rate can be strategic, while high-interest credit card debt can spiral. The goal is not to avoid all borrowing but to use credit strategically.
One step at a time.
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A deposit account allowing frequent deposits and withdrawals for daily transactions. Offers high liquidity with debit card and check-writing but earns little or no interest.
Example: A student opens checking for direct deposit and uses the debit card for purchases.
A deposit account, typically online, paying significantly higher APY than traditional banks due to lower overhead costs.
Example: Traditional bank: 0.05% APY. Online high-yield: 4.5% APY. On $10,000: $5 vs $450 annual interest.
A 300-850 number representing creditworthiness: payment history (35%), amounts owed (30%), length of history (15%), new credit (10%), credit mix (10%).
Example: 780 score = 6.25% mortgage. 620 score = 8.0% mortgage. On $300,000, the difference costs over $150,000.
The annualized cost of borrowing including interest and fees, standardized by TILA for comparison.
Example: 19.99% APR credit card: a $3,000 balance costs ~$600/year in interest.
Secured debt is backed by collateral (home, car). Unsecured debt (credit cards) has no collateral, so rates are higher due to lender risk.
Example: Auto loan at 5% (secured) vs credit card at 22% (unsecured).
Interest charged on principal and accumulated unpaid interest. Credit cards compound daily, making balances grow exponentially.
Example: $5,000 at 20% APR grows to ~$6,100 in one year with no payments.
Spreading a loan into fixed payments where early payments are mostly interest and later ones mostly principal.
Example: 30-year $250,000 mortgage at 6.5%: month 1 is $1,354 interest, $226 principal.
Balance / credit limit as a percentage. Second largest FICO factor (30%). Keep below 30%, ideally below 10%.
Example: $3,000 balance on $15,000 total limits = 20% utilization.
More terms are available in the glossary.
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See how the key ideas connect. Nodes color in as you practice.
Walk through a solved problem step-by-step. Try predicting each step before revealing it.
This is guided practice, not just a quiz. Hints and pacing adjust in real time.
Small steps add up.
What you get while practicing:
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