Flashcard Front, Flashcard Back, Factors to be considered with saving, Interest rate should be higher than inflation, lower risk usually means lower return, some accounts limit access to money, Factors to be considered with investing, Prices can go up or down, profits may be taxed (CGT), risk should be spread through diversified investments, Factors to be considered with borrowing, Failure to repay damages credit rating, fixed rates are less risky but may be higher than variable, penalties may apply for early repayment, Risk tolerance, A consumer’s willingness to accept possible financial loss in exchange for potential reward, What affects risk tolerance, Age, personality, income level, financial stability, Types of financial risk, Financial loss risk, information risk, fraud risk, suitability risk, Reliable sources of financial information, Central Bank, CCPC, MABS, regulated advisors, official bank or credit union sites, Unreliable sources of financial information, Social media influencers, sales pitches, guaranteed profit schemes, unregulated sources, Reasons to switch financial provider, Better rates, better terms, incentives, more convenience, Benefits of fintech, Speed, convenience, more choice, lower costs, better financial tracking, Challenges of fintech, Impulse decisions, cybersecurity risks, digital exclusion, unclear regulation, How a credit rating is established, Central Credit Register keeps credit history, lenders use report to decide if credit is given, Factors that improve credit rating, Pay on time, low credit card balance, good credit history, responsible borrowing, Factors that damage credit rating, Missed payments, high debt, many loan applications, poor repayment history, Consequences of poor credit rating, Harder to get loans, higher interest, difficulty renting or buying, record lasts for years, How the financial industry is regulated, Central Bank of Ireland licenses and supervises banks and financial firms, Consequences of under-regulation, Higher risk, scams, no protection, possible banking collapse, Types of financial fraud, Phishing, smishing, vishing, card skimming, fake shops, investment scams, How consumers protect themselves from fraud, Verify requests, never share PIN/passwords, check statements, avoid suspicious links, What is fintech, Use of technology to deliver financial services, Benefits of digital currency, Faster payments, lower fees, easy tracking, cross-border use, Problems with digital currency, Privacy concerns, need internet, regulation unclear, risk of exclusion, CBDC, Digital currency issued by a central bank, stable and regulated, Stablecoin, Digital currency linked to real asset or currency to reduce volatility, Cryptocurrency, Decentralised digital asset, high risk, not backed by government

Chapter 18 Key Takeaways

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