4.02 Young People and Credit Cards

Instructions

5

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.

VIDEO: Comparing Cards 📷7 min
Before you decide whether you should open a credit card, you need to understand how it differs from a debit or prepaid debit card.

3

What are important details about Debit Cards:

3

What are important details about Credit Cards:

3

What are important details about Pre-Paid Debit Cards:

3

INFOGRAPHIC: What Young People Need to Know About Credit 📷6 min
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.

1

Why might young adults, in particular, value credit in case of emergency?

1

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?

1

Which of the suggestions do NOT rely on the support of a parent or guardian?

VIDEO: Things to Consider When Applying for a Credit Card 📷9 min
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.

4

Which of the four factors directly impact your total cost of using the credit card?_______ _______ _______ _______ 

2

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?

3

Delara is opening a credit card because her budget is really tight right now and she’s struggling to pay all of her expenses based on her income.
Why might a card with a long grace period be in her best interest?_______ 
She knows she’ll be making only the minimum monthly payments each month until she can find a job where she’ll earn more income. This means some of her payment every month will go toward paying interest rather than paying down her principal. What other factor(s) might be most important to Delara? _______ Why?_______ 

ACTIVITY: FINE PRINT: Schumer Box
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.

1

3

1

Which statement is true of both debit AND credit cards?

1

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

1

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

4.02 Young People and Credit Cards

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.

VIDEO: Comparing Cards 📷7 min

What are important details about Debit Cards:

What are important details about Credit Cards:

What are important details about Pre-Paid Debit Cards:

INFOGRAPHIC: What Young People Need to Know About Credit 📷6 min

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?

VIDEO: Things to Consider When Applying for a Credit Card 📷9 min

ACTIVITY: FINE PRINT: Schumer Box

Which statement is true of both debit AND credit cards?

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.

VIDEO: Comparing Cards 📷7 min

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.

INFOGRAPHIC: What Young People Need to Know About Credit 📷6 min

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?

VIDEO: Things to Consider When Applying for a Credit Card 📷9 min

ACTIVITY: FINE PRINT: Schumer Box

What is the introductory APR (interest rate) on this card?
0%
15.24%
23.24%
25.24%

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

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

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

Which statement is true of both debit AND credit 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.

What is the introductory APR (interest rate) on this card?
0%
15.24%
23.24%
25.24%

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

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

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

4.02 Young People and Credit Cards

4.02 Young People and Credit Cards

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.

VIDEO: Comparing Cards 📷7 min

What are important details about Debit Cards:

What are important details about Credit Cards:

What are important details about Pre-Paid Debit Cards:

INFOGRAPHIC: What Young People Need to Know About Credit 📷6 min

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?

VIDEO: Things to Consider When Applying for a Credit Card 📷9 min

ACTIVITY: FINE PRINT: Schumer Box

Which statement is true of both debit AND credit cards?

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.

VIDEO: Comparing Cards 📷7 min

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.

INFOGRAPHIC: What Young People Need to Know About Credit 📷6 min

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?

VIDEO: Things to Consider When Applying for a Credit Card 📷9 min

ACTIVITY: FINE PRINT: Schumer Box

What is the introductory APR (interest rate) on this card?0%15.24%23.24%25.24%

After the introductory period, everyone who has this Platinum Card will...Pay the same APRQualify for an APR based on their creditworthinessPay the Penalty APR of 30.24%Be charged an Annual Fee

Which transaction type has the highest APR?a. Late paymentb. Purchases made during the Introductory Periodc. Balance Transferd. Cash Advance

What might cause someone to lose their introductory APR and trigger the Penalty APR?A. Making only the minimum paymentB. Using the full credit limitC. Missing a payment by more than 60 daysD. 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

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

Which statement is true of both debit AND credit 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.

What is the introductory APR (interest rate) on this card?0%15.24%23.24%25.24%

After the introductory period, everyone who has this Platinum Card will...Pay the same APRQualify for an APR based on their creditworthinessPay the Penalty APR of 30.24%Be charged an Annual Fee

Which transaction type has the highest APR?a. Late paymentb. Purchases made during the Introductory Periodc. Balance Transferd. Cash Advance

What might cause someone to lose their introductory APR and trigger the Penalty APR?A. Making only the minimum paymentB. Using the full credit limitC. Missing a payment by more than 60 daysD. 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

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

What is the introductory APR (interest rate) on this card?
0%
15.24%
23.24%
25.24%

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

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

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

What is the introductory APR (interest rate) on this card?
0%
15.24%
23.24%
25.24%

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

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

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