FOCUS QUESTIONS FOR THIS SECTION
Why do people want to have good credit, and how do they manage it?
How can I be the kind of borrower to whom creditors want to lend?
Section 8: Loans and Credit
SECTION DESCRIPTION
In these lessons, students will explore forms of payment options, in particular using cash versus credit. Students learn the importance of being a trustworthy borrower and how to protect themselves from the misuse of credit by clarifying the dangers associated with credit card use, payday loans, and so on. Students can identify credit reports and realize the importance of managing credit wisely.
LESSON OBJECTIVES
Explain the difference between buying with cash and buying with credit.
Describe the qualities that would be desirable in a person who borrows a favorite personal possession.
LESSON OBJECTIVES
Explain how debit cards differ from credit cards.
Explain why using a credit card is a form of borrowing.
LESSON OBJECTIVES
Explain how interest rate and loan length affect the cost of borrowing.
Use a financial or online calculator to determine the cost of repaying a loan under various rates of interest and over different periods.
Calculate the interest rate for the loan period and its annual equivalent, given an “easy access” loan amount and a 2-week borrowing fee.
Describe potential consequences of using “easy access” credit.
LESSON OBJECTIVES
Describe the information in a credit report and how long it is retained.
Explain the value of credit reports to borrowers and to lenders.
LESSON OBJECTIVES
Explain why it is important to establish a positive credit history.