Do you think it’s a good idea for high school students to have a credit card? What about college students? Adults? Explain why you feel this way.
Learning ObjectivesStudents will be able to:
| National Standards for Personal Financial Education Managing Credit
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Learning ObjectivesStudents will be able to:
| National Standards for Personal Financial Education Managing Credit
|
Before you decide whether you should open a credit card, you need to understand how it differs from a debit or prepaid debit card.
What are important details about Debit Cards:
What are important details about Credit Cards:
What are important details about Pre-Paid Debit Cards:
After watching the video and comparing the cards, which one of the three would be the best option for you as your day-to-day payment method? Explain why.
There’s a ton of good information on this infographic, but let’s focus on two sections which will explain Why Credit Is Useful and, farther down the page, How Young People Get Credit.
Why might young adults, in particular, value credit in case of emergency?
If you’re trying to gain access to a credit card before you turn 21, which of the suggestions rely on the support of a parent or guardian?
Which of the suggestions do NOT rely on the support of a parent or guardian?
Let’s assume you’re going to open a credit card – and you have a plan for how you’ll qualify for one. There are hundreds (or more) cards available to choose from. How should you decide which one is best for you? This video will highlight four important factors – Annual fee, APR, Penalty fees and rates, and Grace period. Watch the video to learn more. Then, answer the questions.
Miles is planning to open a credit card, charge only his monthly streaming service subscriptions (less than $50 per month), and pay his entire bill in full each month so that he never has to pay interest. Which of these factors do you think is most important for Miles to consider when selecting a card? Why?
Which statement is true of both debit AND credit cards?
Felix opens a credit card with no annual fee, so he assumes that using the credit card regularly will be absolutely free for the next two years while he finishes grad school. Why is his assumption incorrect?
Unless he pays the whole bill every month, he will pay interest according to his APR
He will automatically pay penalty fees if he uses his credit card for more than 3 consecutive months
If his grace period is any longer than 10 days, he will have to pay fees
He will need to pay a separate student fee because he is still in grad school
Which statement best describes a Schumer box?
The final calculation of how much you owe on your credit card bill each month
A standardized way of presenting the key terms of your credit card agreement
A legal document stating that you’re behind on your credit card payments
The outstanding balance on your credit card once you’ve made your recent payment
Each of the factors you saw in the video are provided in something called a Schumer Box, which is meant as a written summary of the most important terms and conditions of a specific credit card. Follow the directions on the worksheet to complete this activity.
What is the introductory APR (interest rate) on this card?
0%
15.24%
23.24%
25.24%
Josephine says, “This is a great credit card, because the APR is always 0%!” Which of the following statements is actually TRUE?
The 0% APR will change after six months
She will not pay interest on purchases made on the card for the first year
All of Josephine’s purchases are free for the first six months
All of Josephine’s purchases are free - period.
After the introductory period, everyone who has this Platinum Card will...
Pay the same APR
Qualify for an APR based on their creditworthiness
Pay the Penalty APR of 30.24%
Be charged an Annual Fee
Jordan accidentally uses his credit card to get $40 in cash from an ATM instead of using his debit card. What happens?
There is no impact
A $10 cash advance fee will be charged ONLY
An APR of 25.24% will be applied on the $40 until it is paid back ONLY
A $10 cash advance fee will be charged AND an APR of 25.24% will be applied on the $40 until it is paid back
Which transaction type has the highest APR?
a. Late payment
b. Purchases made during the Introductory Period
c. Balance Transfer
d. Cash Advance
What might cause someone to lose their introductory APR and trigger the Penalty APR?
A. Making only the minimum payment
B. Using the full credit limit
C. Missing a payment by more than 60 days
D. Applying for another credit card
Louisa’s APR was 19.99%, with an average balance of $1,000. About how much interest did she pay over the year?
$0
$20
$200
$2,000
Devon forgets to pay his credit card bill for three months. Which of the following statements is TRUE?
A. He will be charged a Balance Transfer fee of $5
B. He will have to pay a Cash Advance fee of $10
C. His APR will rise to 30.24% until he pays back the amount he owes
D. His APR will rise to 30.24% and stay there until he makes six consecutive minimum payments
Tamara goes to Italy and purchases $200 of souvenirs using her credit card. How much will she pay in foreign transaction fees?
$0
$3.00
$6.00
$35.00
All of the following actions lead to paying a credit card fee EXCEPT...
A. Using your credit card to get cash from an ATM
B. Paying your credit card bill in full and on time every month
C. Using your credit card to purchase items in a foreign country
D. Paying your credit card bill ten days after the Due Date
