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Learning Objectives

Students will be able to:

Identify the major types of credit and their characteristics
Understand the three basic components of lines of credit: principal, interest rate, and term
Define net worth and how it is calculated

National Standards for Personal Financial Education

Managing Credit

1b: Compare the cost of borrowing $1,000 by means of different consumer credit options
2a: Give examples of unsecured and secured loans

0

Reflect on a time where you borrowed from or lent money to someone.
a. who did the loan involve?
b. what was the agreement for repayment?
c. did the agreement work out the way you anticipated?
d. were both people happy at the end?

Question 2

01:10

Question 3

01:41

Question 4

03:00

Question 5

03:40

Estimated Time to Complete: 10 minutes

Directions: Use the infographic to answer the following questions. Make sure to read it carefully first and review what each axis of the graph represents

1

0

If you assume debts get paid off as you get older, why are these bars the same height?

0

Credit card debt is present in every group. What might cause some people to carry a credit card balance for most of their lives?

0

Estimated time to complete: 4 minutes

Many people think that being wealthy means you have a lot of stuff; however, it turns out that what you own is only part of the equation for determining your net worth. Review this infographic to see how wealth or net worth (often used as synonyms) is calculated. Then answer the questions below.

0

Your friends and you notice a neighbor who always has brand new clothes, shoes, and electronics. What would you need to know in order to tell if this neighbor is actually wealthy?

0

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.
a) Explain one way that using credit could help Sanya achieve her goal.

0

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.
b) Explain one way that using credit could hurt Sanya achieve her goal.

1

Which word represents the total cost of the item you’re purchasing on credit minus any down payment you make upfront?

Principal

Term

Interest rate

APR

1

Each of the following represents an installment loan EXCEPT…

Home mortgage

Auto loan

Student loan

Credit card

1

Which of these actions would most likely decrease a person’s net worth for at least the next 6 months?

Use a loan to buy a brand new car

Work 10 hours of overtime each week and put all extra earnings into a savings account

Work 10 hours of overtime each week and use all extra earnings to pay down student loan debt

Open 3 new credit cards but don’t spend any money on them

Lesson 1: Intro to Credit

Learning Objectives

Reflect on a time where you borrowed from or lent money to someone.
a. who did the loan involve?
b. what was the agreement for repayment?
c. did the agreement work out the way you anticipated?
d. were both people happy at the end?

Lesson 1: Intro to Credit

Learning Objectives

Learning Objectives

Reflect on a time where you borrowed from or lent money to someone.
a. who did the loan involve?
b. what was the agreement for repayment?
c. did the agreement work out the way you anticipated?
d. were both people happy at the end?

If you assume debts get paid off as you get older, why are these bars the same height?

Credit card debt is present in every group. What might cause some people to carry a credit card balance for most of their lives?

Your friends and you notice a neighbor who always has brand new clothes, shoes, and electronics. What would you need to know in order to tell if this neighbor is actually wealthy?

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.
a) Explain one way that using credit could help Sanya achieve her goal.

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.
b) Explain one way that using credit could hurt Sanya achieve her goal.

Which word represents the total cost of the item you’re purchasing on credit minus any down payment you make upfront?

Each of the following represents an installment loan EXCEPT…

Which of these actions would most likely decrease a person’s net worth for at least the next 6 months?

Learning Objectives

The details of any loan will include the following 3 components:

Why are secured loans considered less risky to the lender?

Having a good credit score, making a larger down payment, and finding a cosigner with good credit are all ways to...

Each of these statements describes a variable rate loan EXCEPT...

Which age group has the least student debt?

Mortgage makes up most debt in every age group except

If you assume debts get paid off as you get older, why are these bars the same height?

Credit card debt is present in every group. What might cause some people to carry a credit card balance for most of their lives?

If a friend said, "College is a scam -- you'll be paying back student loans for the rest of your life," would you agree or disagree based on the data from this graph?

Your friends and you notice a neighbor who always has brand new clothes, shoes, and electronics. What would you need to know in order to tell if this neighbor is actually wealthy?

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.
a) Explain one way that using credit could help Sanya achieve her goal.

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.
b) Explain one way that using credit could hurt Sanya achieve her goal.

Which word represents the total cost of the item you’re purchasing on credit minus any down payment you make upfront?

Each of the following represents an installment loan EXCEPT…

Which of these actions would most likely decrease a person’s net worth for at least the next 6 months?

The details of any loan will include the following 3 components:

Why are secured loans considered less risky to the lender?

Having a good credit score, making a larger down payment, and finding a cosigner with good credit are all ways to...

Each of these statements describes a variable rate loan EXCEPT...

Which age group has the least student debt?

Mortgage makes up most debt in every age group except

If a friend said, "College is a scam -- you'll be paying back student loans for the rest of your life," would you agree or disagree based on the data from this graph?

Lesson 1: Intro to Credit

Learning Objectives

Reflect on a time where you borrowed from or lent money to someone.a. who did the loan involve?b. what was the agreement for repayment?c. did the agreement work out the way you anticipated?d. were both people happy at the end?

Lesson 1: Intro to Credit

Learning Objectives

Learning Objectives

Reflect on a time where you borrowed from or lent money to someone.a. who did the loan involve?b. what was the agreement for repayment?c. did the agreement work out the way you anticipated?d. were both people happy at the end?

If you assume debts get paid off as you get older, why are these bars the same height?

Credit card debt is present in every group. What might cause some people to carry a credit card balance for most of their lives?

Your friends and you notice a neighbor who always has brand new clothes, shoes, and electronics. What would you need to know in order to tell if this neighbor is actually wealthy?

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.a) Explain one way that using credit could help Sanya achieve her goal.

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.b) Explain one way that using credit could hurt Sanya achieve her goal.

Which word represents the total cost of the item you’re purchasing on credit minus any down payment you make upfront?

Each of the following represents an installment loan EXCEPT…

Which of these actions would most likely decrease a person’s net worth for at least the next 6 months?

Learning Objectives

Which age group has the least student debt?

Mortgage makes up most debt in every age group except

If you assume debts get paid off as you get older, why are these bars the same height?

Credit card debt is present in every group. What might cause some people to carry a credit card balance for most of their lives?

If a friend said, "College is a scam -- you'll be paying back student loans for the rest of your life," would you agree or disagree based on the data from this graph?

Your friends and you notice a neighbor who always has brand new clothes, shoes, and electronics. What would you need to know in order to tell if this neighbor is actually wealthy?

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.a) Explain one way that using credit could help Sanya achieve her goal.

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.b) Explain one way that using credit could hurt Sanya achieve her goal.

Which word represents the total cost of the item you’re purchasing on credit minus any down payment you make upfront?

Each of the following represents an installment loan EXCEPT…

Which of these actions would most likely decrease a person’s net worth for at least the next 6 months?

The details of any loan will include the following 3 components:

Why are secured loans considered less risky to the lender?

Having a good credit score, making a larger down payment, and finding a cosigner with good credit are all ways to...

Each of these statements describes a variable rate loan EXCEPT...

Which age group has the least student debt?

Mortgage makes up most debt in every age group except

If a friend said, "College is a scam -- you'll be paying back student loans for the rest of your life," would you agree or disagree based on the data from this graph?

Reflect on a time where you borrowed from or lent money to someone.
a. who did the loan involve?
b. what was the agreement for repayment?
c. did the agreement work out the way you anticipated?
d. were both people happy at the end?

Reflect on a time where you borrowed from or lent money to someone.
a. who did the loan involve?
b. what was the agreement for repayment?
c. did the agreement work out the way you anticipated?
d. were both people happy at the end?

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.
a) Explain one way that using credit could help Sanya achieve her goal.

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.
b) Explain one way that using credit could hurt Sanya achieve her goal.

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.
a) Explain one way that using credit could help Sanya achieve her goal.

There’s not one target net worth value that is universally considered to be “rich” or “wealthy.” But right now, Sanya’s net worth is $12,000. Her goal is to have a net worth of at least $100,000 before she turns 35.
b) Explain one way that using credit could hurt Sanya achieve her goal.