Source: Consumer Jungle’s lesson on credit

Suggested Target Age: Grades 10-12

Topics Covered:  credit cards

Time Required: 45 minutes (one hour with the optional intro and concluding activities)

What Will the Students Learn?

• How to analyze credit card offers in order to make wise decisions

• How to identify all the fees associated with a credit card

State Content Standards Key
California: History (Principles of Economics) grade 12- 12.5(3)
Florida: SS.D.1.2 (subpoint 3); SS.D.2.2 (subpoint 3); SS.D.1.3 (subpoint 2); SS.D.1.4 (subpoint 2);
Indiana: Math 8.2.2; Economics 6.5, 6.8
Virginia: Math A.1, A.2; CE.4, CE.9; Govt 16, 17; Economics & Financial Literacy Objectives 4,8,9,12,13

Materials Required:
Shopping for a Credit Card Student Worksheet
Credit Card Offer #1
Credit Card Offer #2
Credit Card Offer #3
Teacher Answer Key for Offer 1
Teacher Answer Key for Offer 2
Teacher Answer Key for Offer 3

Log-in information for the Penn State credit quiz game (website: http://cccr.psu.edu/programs/online.htm) See the text at the end of the lesson under “Optional Concluding Activity” for details and instructions.

Teacher Preparation
Prior to teaching this lesson, you can give yourself a good refresher course on the basics of credit cards by reviewing this power point lesson from Consumer Jungle called Shopping for a Credit Card.

NOTE: This lesson can be done with or without computers/Internet access. If the instructor has a computer, Internet access, and an LCD projector, you will be able to do the optional introduction. If students have access to computers/Internet, you will be able to do the optional closing activity.

Lesson Plan:

Set-Up: Gather students in the classroom and have the various handouts already downloaded and photocopied for use.

Optional Introduction: If you have a live Internet connection on the computer that is attached to the LCD projector, you could show the students a brief (3 minute) video about a young woman who got into thousands of dollars of credit card debt. Go here: http://www.pbs.org/inthemix/shows/show_money.html then click “Show Clips” at the top right of the screen. This opens a new window that asks what kind of Internet connection you have. When you click DSL, it opens a new window and begins playing the video clip automatically in Real Player (you may need to download Real Player, for free, onto your computer if you don’t already have it.)

Regular Introduction: Ask students if they have ever received a credit card offer in the mail. Tell them if they haven’t yet, they will be getting them soon. That’s why it’s important to be able to understand all the rules about credit cards. The offers typically come with a lot of papers written in very small print – and many times, people don’t bother reading the “fine print.” That often means that they end up getting stuck with fees and charges that will surprise them. Tell the students that for today’s activity, they are going to learn how to detect all the fees and rules in different credit card offers.

1. First, have the students brainstorm about the pro’s and con’s of having a credit card. Write their thoughts down on the board. (You can use Appendix 1 below, which lists the upside and downside of credit cards, as a resource if the students don’t come up with lots of ideas on their own.)

2. Break the class down into three groups. Provide the “Shopping for a Credit Card Student Worksheet” to all students.

3. Hand out copies of Credit Card Offer #1 to group one, Credit Card Offer #2 to group two, and Credit Card Offer #3 to group three.

4. Instruct each group to use their worksheet and identify the various features of their credit card (A, B, or C for groups 1, 2, and 3 respectively) and fill in their answers on the worksheet. (The students will be browsing through the credit Card Offers to locate information on annual fees, APR, late payment fees, over-the-limit fees, length of the grace period, enrollment fees, etc.)

5. While the students work on this, draw on the board a basic chart, using the Shopping for a Credit Card Student Worksheet as your guide.

6. Have one student from each group report back their findings, and fill in their answers on the big chart you have drawn on the board, so everyone can see. (To check the student’s answers, refer to the Teacher answer key for each credit card offer -- it highlights in yellow the correct information:

Teacher Answer Key for Offer 1

Teacher Answer Key for Offer 2

Teacher Answer Key for Offer 3

7. Ask the students to decide which credit card offer is the best one.

OPTIONAL concluding activity: If your students have access to a computer lab where the computers are on-line, they could end this session by playing an on-line quiz show game about credit cards. The game was developed by Penn State University. Since students have to set up a (free) user account to play the game, you may wish to go into the website in advance of the lesson and set up five student accounts (more than one student can log in and play the game on the same account). To set up several accounts, you would go here: http://cccr.psu.edu/programs/online.htm Then set up several accounts, being sure to write down the user names and passwords you use. Once you have several accounts registered, you can then give your kids that log in info. They would go to the same link, log in and then play the game. The game poses several questions about credit cards, with multiple-choice answers. Students have limited time to answer each question.

Appendix 1

Credit Cards: Blessing or Curse?

The Upside:

• Credit cards offer protection against theft of your cash.
• You can buy items and services you need when you need them, even if you don’t have enough cash for them.
• Credit cards can be lifesavers, and your parents may want you to carry a credit card to pay for gas, repairs, emergency phone calls, etc.
• Managing your credit cards well can build up a solid credit history for the future.
• If you can use credit responsibly, you’ll end up a smarter money manager.

The Downside:

• Credit cards make it very easy to buy things that are out of your league, to the point where you can’t pay the bill when it comes due.
• When you carry a credit card, it’s tempting to buy on impulse and forget you’re actually spending money, or that you’re spending future income that you don’t have (and may never have!).
• If you only pay the minimum balance each month, it will take years to pay off the balance, and accumulating interest on that balance can make what you bought cost much, much more in the long run.
• If you fall behind on paying your credit card bills, it can damage your credit rating and make it harder for you to get loans in the future.