dollar sign Credit Cards Facts Activity

"If you make just the minimum payment, you have effectively DOUBLED your purchase price." Manisha Thakor

Directions: Use the links on The Mint.org and PBS's Credit Card site to develop your answers to the questions. Answer sheet.

1. Write 3 advantages of credit cards.

a.

b.

c.

 

2. Write 3 disadvantages of credit cards.

a.

b.

c.

 

3. Find Out:

Should you sign up for a card that charges an annual fee? Explain.

 

 

Some people think more is always better. Do you want a high interest rate on a credit card or a low one? Explain.

 

 

What happens if you do not pay the payment on time?

 

 

Why should you investigate the regular interest rate of the card along with the introductory offer?

 

 

4. I paid How Much? Write the answers to the 2 questions on the web page.

 

Calculate: You paid much more for the $2000 worth of items because you paid them off, over a long time.
Write as a percentage how much more you paid.

 


5. What is Your Credit Card I.Q.? Write your score.

 

6. Write four questions to ask yourself before buying something on a credit card.

a.

b.

c.

d.

 

7. Do What Kind of Spender Are You? Write your result.

 

8. What factors go into calculating a credit score? Second info source Your Credit Score

 

9. Things are slow at work. You get 5 less hours this week. You are short when your car payment is due.
You pay it a week later. How will this impact your credit card's default interest rate?

 

 

10. Take the Spending Challenge. How did you do?

 

 

11. Debit card hold - What you risk by using debit card at the pump. Why should you pay cash for your gas.?

 

12. Mandatory - Watch Credit Card versus Debt Card.

Which should you use to buy a drink: cash, credit card, debt card? Explain your choice.

 

Extensions:

Credit Card Executives Tough Out Senate Hearing - Watch the Senate Committee hearing Credit Card Practices

Ouch! 90 million Americans carry an average of $8,000 in debt from month to month. On average Americans each have $2.000 in credit card debt.

Join the deadbeats - (Credit card company slang for people who pay off the balance in full each month).
55 million Americans pay off their credit card balances in full each month. We are laughing all the way to the bank!

Best choice - Pay with cash. Go to the "Mac/cash withdrawl machine" at your bank. Withdraw an amout you believe will be enough for your purchases. If you are short, you can pay cash and use the credit card or debit card to cover the difference out of your checking account. You will be more conscious of your spending. You will be less likely to overspend or impulse buy. Did you know the credit card companies charge the merchant a fee for each purchase? By paying cash you help the local merchants by increasing their bottom line without increasing your costs! The credit card and mac debit companies keep the data about what you buy. They sell this information about you. Paying cash - Protects your privacy.

Too many people spend money they haven't earned, to buy things they don't want,
to impress people they don't like. ~ Will Smith

To do -

Read this article - Life without plastic CNN Money 6/17/08

red check mark Explain the effect credit cards have on users.

Watch Credit Scoring System and Credit Scores testimony video at CSPAN.

red check mark Name three mistakes consumers make that hurt their credit score.

red check mark How does a poor credit score impact the price you pay for things?

 

Read this New York Times editorial - Curbing Credit Card Predators - 12/26/08

red check mark Respond with your own opinion piece that is rich in the knowledge you have gained
spacer by competing this activity and your own experience.

Debit card or credit card?

red check mark Cash, check, debit card or credit card. Which is the best choice for you?

Watch Senate Hearing on Credit Card Practices (12/04/2007) on CSpan.org (Search the archives to find the video)

red check mark Make a 3 point - self defense tip sheet for credit cards users.

dollar sign Challenges:

Where Your Paycheck Goes Explore The Secret History of Credit Cards at PBS
Do Who Controls the Real Cost of Credit Develop a personal finances plan
The Entrepreneur Challenge Gift card fees may nibble at value
Money 101 at CNNMoney.com Holiday Gift Cards Can Hide Fees
MoneyTalks News that pays personal finance online videos Pennsylvania Office of Financial Education lots of free resources
360 Degrees of Financial Literacy Avoid Credit Card Debt During the Holidays
Manage your Money 101 High-Priced Student Loans Spell Trouble
MyMoney.gov- free financial education ressources Credit Card Tips and Tricks - NOW on PBS

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All trademarks, copyright and logos belong to their respective owners.

This activity is released to public domain. Use it freely to help people get control of their finances. Updated 1/2015 by Cynthia O'Hora

tree icon Save a tree - use a Digital Answer Sheet: Highlight the text of the questions on this web page, copy them - Edit .. Copy. Open a text document or word processing document. Paste the questions into the blank document. Answer the questions in the word processing document in a contrasting color ( not yellow) or font (avoid fancy fonts like: black, Symbol, dearform fomnt or broad. Save frequently as you work. I do not like losing my work. You will not like it either. Put your name and the date in a header. Bad things happen. Retain a copy of your work on your computer. Submit your assignment via a class electronic drop box or email attachment.

Proof your responses. It is funny how speling errors and typeos sneak in to the bets work. smiling icon Make Your Own Printed answer sheet

Tech Tip: Working in a group or in two different places like the library & home? You do not have to be physically together to work together.
gold star Watch Google Docs video TAI - How could you use free, Google Docs to do a project?