Teacher Script: Debt & Credit

Warm-Up: What's Your Money Story? (10 minutes)

(Project Slide 1: "Debt & Credit: Decode It!")

"Good morning, everyone! Today we're diving into a topic that is super relevant to your lives right now, and especially as you get ready for life after high school. We're going to talk about debt and credit. Before we go any further, I want you to take a moment and just think: What comes to mind when you hear the words 'debt' or 'credit'? Don't overthink it, just write down the first few things that pop into your head. You have about two minutes for this personal reflection."

(After 2 minutes)

"Alright, now that you've had a chance to think individually, I want you to turn to a partner. For the next three minutes, share your thoughts with each other. What did you write down? Did your partner have similar ideas or something completely different?"

(After 3 minutes)

"Okay, let's bring it back together. Would a few pairs be willing to share some of your thoughts with the whole class? What did you discuss?"

(Listen to student responses, affirming and connecting their ideas. Guide the conversation towards the idea that debt isn't always negative, and credit can be a powerful tool if used wisely.)

"Excellent points! Many of you mentioned things like loans, responsibility, money, and maybe even some worries. And that's exactly what we're going to explore today. Understanding debt and credit is incredibly important because it impacts so many aspects of our lives – from buying a car or a home, to going to college, or even just renting an apartment. My goal today is to help you decode these financial terms so you feel more confident about your financial future."

Vocabulary & Notes: Decoding Financial Lingo (15 minutes)

"To do that, we need to make sure we're all speaking the same financial language. I'm handing out a Key Vocabulary & Notes Graphic Organizer. This will help you keep track of all the important terms we're going to cover. For those of you who might need a little extra support, you have a graphic organizer with some of the definitions already filled in."

(Distribute Key Vocabulary & Notes Graphic Organizer. Project Slides 2-8, pausing after each term.)

"First up, let's talk about Debt, or in Spanish, Deuda. Debt is simply money owed to another person or entity. It's a commitment to pay back money you've borrowed. Think of a student loan – you borrow money for college, and you're in debt until you pay it back. Other examples are mortgages for houses, or balances on credit cards. It's not always a bad thing, but it's something you have to manage carefully."

"Next, we have Credit, or Crédito. Credit is the ability to obtain goods or services before payment, based on the trust that payment will be made in the future. It's like your financial trustworthiness. If you have good credit, lenders trust you to pay them back. If you have poor credit, they might not trust you as much."

(After a couple of terms, implement Stop and Jot)

"Alright, let's hit pause for a moment. Stop and Jot: In your notes, write down one question you have about Debt or Credit so far, or one way you think these terms might affect your life. Just a quick thought."

(Allow 1 minute. Ask for a few volunteers to share their jots.)

"Great. Let's continue. A Loan, or Préstamo, is a sum of money lent with an agreement that it will be paid back, usually with interest. We hear about car loans, personal loans, home loans – these are all agreements where you get money upfront and promise to repay it over time."

"Which brings us to Interest, or Intereses. Interest is the cost of borrowing money. It's usually expressed as a percentage of the amount you borrowed. So, when you take out a loan, you don't just pay back the amount you borrowed, called the Principal (or Principal in Spanish), you also pay extra money as interest to the lender for the privilege of using their money."

"Now, a very common form of credit is a Credit Card, or Tarjeta de Crédito. This is a small plastic card that allows you to buy things now and pay for them later. It's a type of revolving credit, meaning you can borrow up to a certain Credit Limit (or Límite de Crédito) and as you pay it back, that credit becomes available again. But remember, if you don't pay your full balance, you'll be charged interest!"

"And that interest rate on a credit card or loan is often called the APR, which stands for Annual Percentage Rate (or Tasa de Porcentaje Anual). This is the annual rate charged for borrowing, expressed as a single percentage. When you're comparing credit cards or loans, the APR is a huge factor because it tells you the true annual cost of borrowing."

"Finally, your Credit Score, or Puntuación de Crédito, is a number assigned to you that indicates your capacity to repay debt. A higher score means you are seen as less risky by lenders, making it easier to get loans or credit cards with better terms. This score is really important for your financial future."

Reading & Discussion: The Credit Conundrum (15 minutes)

"Now that we have our vocabulary down, let's put some of this into context. I'm going to hand out a reading called Reading: The Credit Conundrum. I want you to read it quietly to yourselves. It's about a student navigating credit for the first time."

(Distribute Reading: The Credit Conundrum. Allow 10 minutes for reading.)

"Okay, let's discuss. Based on the reading and our vocabulary, what were some of the key challenges or decisions the character faced? What advice would you give them? We'll use these Discussion Questions: Credit Conundrum to guide us."

(Facilitate a brief discussion, using prompts from the discussion material to ensure students connect the reading to the vocabulary and concepts.)

Activity: Debt Decisions (Out of Your Seat) (15 minutes)

"Time to get out of your seats! We're going to play a game called Debt Decisions. I'm going to present you with a scenario, and I want you to move to the corner of the room that best represents what you would do, or what you think is the smartest decision. Be ready to explain your choice!"

(Project Slide 9: Activity: Debt Decisions - Scenario 1)

"Scenario 1: You need a new laptop for school. Do you..."

• "Corner A: Save up money to buy it with cash."
• "Corner B: Use a credit card and pay it off over a few months."
• "Corner C: Take out a small personal loan."

(Allow students to move. Ask 1-2 students from each corner to briefly explain their reasoning. Emphasize pros and cons of each choice.)

(Project Slide 10: Activity: Debt Decisions - Scenario 2)

"Scenario 2: You have a credit card with a high balance. Do you..."

• "Corner A: Only pay the minimum payment each month."
• "Corner B: Pay as much as you can above the minimum payment."
• "Corner C: Ignore it and hope it goes away."

(Allow students to move and discuss. Highlight the dangers of only paying the minimum and the importance of paying more.)

(Project Slide 11: Activity: Debt Decisions - Scenario 3)

"Scenario 3: You want to build good credit. Do you..."

• "Corner A: Open multiple credit cards at once."
• "Corner B: Get one credit card and use it responsibly, paying on time."
• "Corner C: Never get a credit card."

(Allow students to move and discuss. Emphasize responsible credit card use and avoiding opening too many accounts.)

Key Considerations: Choosing Wisely (5 minutes)

"Excellent participation in the Debt Decisions activity! Now, before we dive into comparing specific financial products, let's talk about the important things you should consider when you're thinking about getting a credit card or applying for a loan."

(Project Slide 12: Choosing a Credit Card: What to Ask?)

"When it comes to credit cards, you need to be a detective! Let's look at some key questions you should ask yourself:

• What is the APR (Annual Percentage Rate)? This tells you how much interest you'll pay if you don't pay off your balance in full.
• Are there any Annual Fees? Some cards charge a yearly cost just to have them.
• What is the Credit Limit? This is the maximum amount you can borrow.
• Does it offer Rewards or Cash Back? Are there benefits for spending with this card?
• What are the Late Payment Fees? What happens if you miss a payment?

(Project Slide 13: Applying for a Loan: Key Factors)

"Loans also have their own set of important questions to consider:

• What is the APR/Interest Rate? Again, this is the cost of borrowing the money.
• What is the Loan Term? How long do you have to pay back the loan?
• What will the Monthly Payment be? Can you realistically afford this every month?
• Are there any Origination Fees? These are upfront costs to get the loan.
• What is the Total Cost of the Loan? This includes the principal and all the interest you'll pay back."

"Keeping these considerations in mind will help you make smart financial choices, and that's exactly what you'll practice in our next activity."

Worksheet: Credit Card & Loan Comparison (20 minutes)

"Fantastic job with those decisions! Now, let's apply some of what we've learned to a practical exercise. I'm handing out the Worksheet: Credit Card & Loan Comparison. Your task is to compare two hypothetical credit card offers and two loan offers. You'll need to use the vocabulary we discussed and consider important questions like the APR, interest rates, and fees."

**(Distribute Worksheet: Credit Card & Loan Comparison.)

"For those who might find it helpful, your worksheet includes some sentence stems to help you articulate your comparisons. For example, you might say, 'Card A is better than Card B because...' or 'This loan has a higher APR, which means...'. Use your Key Vocabulary & Notes Graphic Organizer to help you as you work independently."

(Circulate the room, providing support and answering questions. After students have had ample time, either review answers as a class using the Answer Key: Credit Card & Loan Comparison or have students self-check.)

Game: Credit Score Quest (5 minutes)

"We're almost there! Let's quickly play a game called Credit Score Quest to solidify our understanding. I'll ask a series of quick questions or present a scenario. If you give the correct answer or identify the smart financial move, your 'credit score' goes up! Incorrect answers might ding your score!"

(Project Slide 14: Game: Credit Score Quest!)

*(Engage students with 3-5 quick true/false or multiple-choice questions related to the lesson content. Examples:)

• "True or False: Paying your credit card minimum is always the best strategy to avoid interest."
  • (False - only paying minimum leads to more interest over time)
• "Which helps build good credit? A) Missing payments, or B) Paying bills on time?"
  • (B) Paying bills on time)
• "What does APR stand for?"
  • (Annual Percentage Rate)

Cool-Down: Financial Future Reflection (5 minutes)

"You've done an amazing job today tackling some really important financial concepts. To wrap up, I'm handing out a Cool Down: Financial Future Reflection exit ticket. Please take a few minutes to complete it quietly."

(Project Slide 15: Reflect and Plan Your Financial Future. Distribute Cool Down: Financial Future Reflection exit tickets.)

"Think about what we discussed today. What's one key takeaway from our lesson on debt and credit? And what's one specific step you can take towards a healthier financial future based on what you learned? Once you're done, please hand it to me on your way out."

"Thank you all for your engagement today. I hope you walk away feeling more informed and empowered about your financial journey!"

The Credit Conundrum: Maria's First Card

Maria was a bright-eyed high school senior, buzzing with excitement about college. She'd just turned 18, and it felt like a new world of independence was opening up. One day, while checking her mail, she found an offer: a pre-approved credit card! It had a shiny picture of a beach, promised cash back, and had a tempting 0% introductory APR for the first six months.

Her best friend, Leo, had just gotten a credit card too. "It's awesome!" Leo had said. "You buy what you want now, and pay later. Just make sure you pay it off every month, and you'll build great credit!"

Maria remembered her parents always saying, "Be careful with credit cards! They can get you into trouble if you're not responsible." She understood the idea of debt – money you owe. She knew that a loan was a specific amount of money you borrowed and had to pay back with interest, which was the extra cost for borrowing the money. But a credit card felt a bit different, more flexible.

She decided to apply and was approved! Her credit limit was $1000. Maria was excited. She used it to buy some new clothes for college, textbooks, and even a ticket to a concert. Each month, she received a statement. She always tried to pay the full balance, but sometimes she couldn't. "No big deal," she thought. "I'll just pay the minimum payment and catch up next month."

After the first six months, the 0% introductory APR (Annual Percentage Rate) ended, and her interest rate jumped to 24%. Suddenly, her minimum payments barely covered the interest, and her total debt wasn't going down much, even when she made payments. Her initial excitement turned to worry. The concert ticket, which cost $50, now felt like it was costing her much more due to the accumulating interest.

She talked to her older cousin, Sofia, who was a financial whiz. Sofia explained, "Maria, you're experiencing the power of compound interest, but in reverse! When you only pay the minimum, especially with a high APR, your balance grows fast. Your credit score can also be affected if you carry a high balance or miss payments. Lenders look at that score to see how risky you are. A good score can get you better loans and credit cards in the future."

Sofia helped Maria create a plan. They focused on paying more than the minimum payment each month, even if it was just a little extra. Maria also cut back on non-essential spending. It took a while, but slowly, her balance started to shrink. Maria learned a valuable lesson: credit cards are powerful tools, but they demand discipline and understanding to avoid a credit conundrum.

Credit Card & Loan Comparison Worksheet

Instructions: Read the hypothetical credit card and loan offers below. Use your knowledge of key financial terms to compare them and answer the questions that follow. Remember to use the vocabulary you learned!

Part 1: Credit Card Comparison

Credit Card Offer A: "The Starter Card"

• APR: 22% (after 0% intro APR for 3 months)
• Credit Limit: $500
• Annual Fee: $0
• Cash Back: 1% on all purchases
• Late Payment Fee: $35

Credit Card Offer B: "The Rewards Card"

• APR: 18% (no intro APR)
• Credit Limit: $1500
• Annual Fee: $50
• Cash Back: 3% on groceries and gas, 1% on everything else
• Late Payment Fee: $39

Questions:

1. Which credit card has a lower standard APR? What does a lower APR mean for you?
   
   
   
   

2. If you plan to carry a balance sometimes, which card might be better for you and why? Use the term interest in your answer.
   
   
   
   
   
   
   

3. Which card offers a higher credit limit? What are the potential pros and cons of a higher credit limit?
   
   
   
   
   
   
   

4. Consider the annual fee and cash back rewards. Which card seems to offer better value for someone who spends a lot on groceries and gas? Explain your reasoning.
   
   
   
   
   
   
   
   
   
   
   
   

Part 2: Loan Comparison

Personal Loan Offer X: "Quick Cash Loan"

• Loan Amount: $2,000
• Interest Rate (APR): 15%
• Loan Term: 12 months
• Origination Fee: $100 (deducted from loan amount)
• Monthly Payment (estimated): $180

Personal Loan Offer Y: "Long-Term Solution Loan"

• Loan Amount: $2,000
• Interest Rate (APR): 10%
• Loan Term: 24 months
• Origination Fee: $0
• Monthly Payment (estimated): $92

Questions:

1. Which loan has a lower APR? How does this impact the total cost of the loan?
   
   
   
   

2. Compare the loan terms. Which loan will you pay off faster, and which will have lower monthly payments? Explain the trade-off.
   
   
   
   
   
   
   

3. Consider the origination fee. How does this affect the amount of money you actually receive from Loan X? Use the term principal in your answer.
   
   
   
   
   
   
   

4. Sentence Stem Scaffolding: Choose one of the following to complete, then explain your choice:

   • "Loan X might be a better choice for someone who... because..."
   • "Loan Y offers a better deal in terms of... because..."
   • "I would choose __________ because..."
     
     
     
     
     
     
     
     
     
     
     
     
     

Part 3: Building & Decreasing

1. List two strategies to decrease debt.

   1. 
      
      
      
   2. 
      
      
      

2. List two strategies to build good credit.

   1. 
      
      
      
   2. 
      
      
      

Answer Key: Credit Card & Loan Comparison Worksheet

Part 1: Credit Card Comparison

1. Which credit card has a lower standard APR? What does a lower APR mean for you?

   • Credit Card Offer B has a lower standard APR (18% vs. 22%).
   • A lower APR means you will pay less in interest if you carry a balance on your credit card. This saves you money in the long run.

2. If you plan to carry a balance sometimes, which card might be better for you and why? Use the term interest in your answer.

   • Credit Card Offer B might be better if you plan to carry a balance because it has a lower APR (18%). This means you will accumulate less interest on your outstanding balance compared to Card A (22% APR).

3. Which card offers a higher credit limit? What are the potential pros and cons of a higher credit limit?

   • Credit Card Offer B offers a higher credit limit ($1500 vs. $500).
   • Pros: More purchasing power, and if you manage it well, it can help your credit utilization ratio (using a small percentage of your available credit) which positively impacts your credit score.
   • Cons: Higher potential to fall into debt if you overspend, as you have more available funds to borrow.

4. Consider the annual fee and cash back rewards. Which card seems to offer better value for someone who spends a lot on groceries and gas? Explain your reasoning.

   • Credit Card Offer B likely offers better value for someone who spends a lot on groceries and gas. While it has an annual fee of $50, it offers 3% cash back on these categories. If a person spends enough on groceries and gas, the 3% cash back could easily outweigh the $50 annual fee, especially compared to Card A's universal 1% cash back and no fee. For example, spending $2000 on groceries/gas with Card B would earn $60 cash back, covering the annual fee and still providing a $10 benefit. Card A would only give $20 back on that spending.

Part 2: Loan Comparison

1. Which loan has a lower APR? How does this impact the total cost of the loan?

   • Personal Loan Offer Y has a lower APR (10% vs. 15%).
   • A lower APR means the interest charged on the principal will be less, resulting in a lower total cost for the loan over its lifetime.

2. Compare the loan terms. Which loan will you pay off faster, and which will have lower monthly payments? Explain the trade-off.

   • Loan X has a shorter loan term (12 months), meaning you will pay it off faster.
   • Loan Y has lower estimated monthly payments ($92 vs. $180) due to its longer loan term (24 months).
   • Trade-off: A shorter loan term (Loan X) usually means higher monthly payments but less total interest paid. A longer loan term (Loan Y) means lower monthly payments but more total interest paid over the life of the loan.

3. Consider the origination fee. How does this affect the amount of money you actually receive from Loan X? Use the term principal in your answer.

   • Loan X has a $100 origination fee. This fee is typically deducted from the principal loan amount before it's disbursed to you. So, even though you borrowed $2,000, you would only receive $1,900 after the fee is taken out.

4. Sentence Stem Scaffolding: (Answers will vary, but here are examples)

   • "Loan X might be a better choice for someone who wants to pay off their debt quickly and can afford higher monthly payments because the shorter term means less interest overall, despite the higher monthly cost."
   • "Loan Y offers a better deal in terms of lower monthly payments and no upfront fees because it makes the loan more affordable on a month-to-month basis, although you'll pay more interest in total due to the longer term."
   • "I would choose Loan Y because the lower monthly payments make it more manageable for my budget, and there's no origination fee. I'm willing to pay a little more interest over time for that flexibility."

Part 3: Building & Decreasing

1. List two strategies to decrease debt.

   1. Pay more than the minimum payment on credit cards and loans.
   2. Create a budget and cut unnecessary expenses to free up money for debt repayment.
   3. Consider debt consolidation or a balance transfer if eligible and it makes financial sense (lower interest rate).
   4. Prioritize high-interest debt first (debt snowball or avalanche method).

2. List two strategies to build good credit.

   1. Pay all your bills (credit cards, loans, utilities) on time, every time.
   2. Keep your credit utilization low (try to use less than 30% of your available credit limit).
   3. Don't open too many new credit accounts at once.
   4. Maintain a mix of credit (e.g., a credit card and a small loan), but only if you can manage it responsibly.
   5. Regularly check your credit report for errors.

Key Vocabulary & Notes: Debt & Credit

Instructions: Fill in the definitions for each term. For students with IEPs, some definitions are already provided to help you get started.

Section 1: Core Concepts

1. Debt (Deuda)

Definition: Money owed to another person or entity.

• IEP Scaffolding: It's like when you borrow money and promise to pay it back.
• Examples: Student loans, mortgages, credit card balances.

2. Credit (Crédito)

Definition: The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.

• IEP Scaffolding: It's your reputation for paying bills on time.
• Importance: Helps you borrow money for big purchases like a house or car.

3. Loan (Préstamo)

Definition: A sum of money lent with an agreement that it will be paid back, usually with interest.

• IEP Scaffolding: Money you borrow and agree to pay back.
• Types: Car loan, student loan, home loan (mortgage).

4. Interest (Intereses)

Definition: The cost of borrowing money, usually expressed as a percentage of the amount borrowed.

• IEP Scaffolding: The extra money you pay to borrow money.
• Think: Like a rental fee for using someone else's money.

5. Principal (Principal)

Definition: The original amount of money borrowed, excluding any interest or fees.

• IEP Scaffolding: The original amount you borrow.
• Example: If you take out a $1000 loan, $1000 is the principal.

Section 2: Credit Cards & Scoring

6. Credit Card (Tarjeta de Crédito)

Definition: A small plastic card issued by a bank or business, allowing the holder to purchase goods or services on credit.

• IEP Scaffolding: A card that lets you buy now, pay later.
• Note: It's a form of revolving credit – as you pay, you can borrow again.

7. APR (Annual Percentage Rate) (Tasa de Porcentaje Anual)

Definition: The annual rate charged for borrowing, expressed as a single percentage number.

• IEP Scaffolding: The yearly cost of borrowing money on a loan or credit card.
• Why it matters: Helps you compare the true cost of different credit cards or loans.

8. Credit Limit (Límite de Crédito)

Definition: The maximum amount of money you are allowed to borrow on a credit card or line of credit.

• IEP Scaffolding: The most money you can spend on your credit card.
• Responsible Use: Try to keep your spending well below this limit.

9. Minimum Payment (Pago Mínimo)

Definition: The smallest amount of money you are required to pay on your credit card bill each month.

• IEP Scaffolding: The least amount you have to pay on your credit card bill.
• Warning: Only paying the minimum can lead to high interest charges and a longer time to pay off debt.

10. Credit Score (Puntuación de Crédito)

Definition: A number assigned to a person that indicates their capacity to repay a debt.

• IEP Scaffolding: A number that shows how good you are at paying back money.
• Impact: A higher score makes it easier to get loans, rent apartments, and even get certain jobs.

Discussion Questions: The Credit Conundrum

Instructions: After reading "The Credit Conundrum: Maria's First Card," discuss the following questions with your classmates.

1. What was Maria's initial understanding of a credit card? How did her friend Leo influence her perception?
   
   
   
   

2. Maria's parents warned her about credit cards. What specific advice might they have given her after she got her first card?
   
   
   
   
   
   
   

3. What is the significance of the 0% introductory APR mentioned in the story? What happened when it ended?
   
   
   
   
   
   
   

4. Maria decided to only pay the minimum payment sometimes. Based on what you've learned about interest and APR, explain why this became a problem for her.
   
   
   
   
   
   
   
   
   
   
   
   

5. How did Sofia help Maria understand her situation? What key financial concept did Sofia explain?
   
   
   
   
   
   
   

6. If you were Maria's friend at the beginning of the story, what responsible advice would you give her about using her first credit card? Use at least two vocabulary terms from our lesson.
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   

Sentence Stems for Discussion:

• "Maria's initial understanding was..."
• "Her parents might have advised her to... because..."
• "The 0% introductory APR was important because..., but when it ended, it meant..."
• "Only paying the minimum became a problem because the interest..."
• "Sofia explained the concept of... which means..."
• "If I were Maria's friend, I would tell her to... by..."

Out of Your Seat Activity: Debt Decisions

Instructions: Listen as your teacher presents different financial scenarios. Move to the corner of the room (or designated area) that best represents the choice you would make, or the choice you believe is the most financially responsible. Be prepared to explain your reasoning!

Scenario 1: The Urgent Purchase

You need a new laptop for school ASAP, but you don't have enough cash saved. What do you do?

• Corner A: Save up money to buy it with cash, even if it means waiting a bit.
• Corner B: Use a credit card to buy it and plan to pay it off over a few months.
• Corner C: Take out a small personal loan from a bank or credit union to buy it.

Discussion Prompts for Scenario 1:

• What are the benefits of saving up cash? What are the drawbacks if it's truly urgent?
• What are the risks of using a credit card for this purchase? What if you can't pay it off quickly?
• What are the considerations when taking out a personal loan? How does interest play a role here?

Scenario 2: The Growing Credit Card Balance

You have a credit card with a balance of $800, and your statement just arrived. What's your priority?

• Corner A: Only pay the minimum payment this month, as it's all you can afford right now.
• Corner B: Pay as much as you possibly can above the minimum payment.
• Corner C: Ignore the statement for now and deal with it next month.

Discussion Prompts for Scenario 2:

• What happens if you only pay the minimum payment on a high-interest credit card?
• How does paying more than the minimum help you in the long run? (Think about interest and total debt).
• What are the immediate and long-term consequences of ignoring your credit card statement?

Scenario 3: Building Your Credit Future

You're ready to start building a positive credit history. What's the best first step?

• Corner A: Open multiple credit cards from different banks to show you can manage many accounts.
• Corner B: Get one credit card, use it for small purchases, and pay the full balance on time, every month.
• Corner C: Avoid all forms of credit (loans, credit cards) to prevent ever getting into debt.

Discussion Prompts for Scenario 3:

• Why might opening too many credit cards at once be a bad idea for your credit score?
• How does responsible use of one credit card help build a good credit score?
• What are the pros and cons of avoiding all credit? How might that impact your future financial goals?

Game: Credit Score Quest!

Instructions: Listen to each statement or scenario from your teacher. Decide if it represents a "Good Credit Move" (earn points for your credit score!) or a "Bad Credit Move" (lose points!). Be ready to quickly explain why!

Round 1: True or False?

1. Statement: Paying your credit card bill two weeks late won't really hurt your credit score if you pay it eventually.

   • Good Credit Move or Bad Credit Move?
     
     
     
   • Explanation:
     
     
     

2. Statement: Keeping your credit card balance close to your credit limit shows lenders you can handle a lot of credit.

   • Good Credit Move or Bad Credit Move?
     
     
     
   • Explanation:
     
     
     

3. Statement: An APR of 10% on a loan is generally better than an APR of 20%.

   • Good Credit Move or Bad Credit Move?
     
     
     
   • Explanation:
     
     
     

4. Statement: If you only pay the minimum payment on your credit card every month, you will quickly pay off your debt.

   • Good Credit Move or Bad Credit Move?
     
     
     
   • Explanation:
     
     
     

Round 2: Scenario Showdown!

1. Scenario: You have an unexpected car repair bill of $500. You have $200 in savings. You put the remaining $300 on your credit card and plan to pay it off in full next payday.

   • Good Credit Move or Bad Credit Move?
     
     
     
   • Explanation:
     
     
     

2. Scenario: You open three new credit cards in one month to get all the sign-up bonuses, even though you don't have a plan to use them all regularly.

   • Good Credit Move or Bad Credit Move?
     
     
     
   • Explanation:
     
     
     

3. Scenario: You check your credit report annually to make sure there are no errors and to understand your financial standing.

   • Good Credit Move or Bad Credit Move?
     
     
     
   • Explanation:
     
     
     

Cool Down: Financial Future Reflection

Instructions: Please reflect on today's lesson and answer the following questions honestly.

1. What is one new thing you learned about debt, credit, loans, or credit cards today that you didn't know before?
   
   
   
   
   
   
   

2. Why is it important for you to understand these financial concepts as you prepare for your future?
   
   
   
   
   
   
   

3. Based on what you learned, what is one specific step you can take right now or in the near future to ensure you build a healthy financial future? (e.g., talk to a parent, research a savings account, plan a budget)
   
   
   
   
   
   
   
   
   
   
   
   

Sentence Stem:

• "After today's lesson, I plan to... to help manage my financial future because..."