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Key to the Future
Chapter 2, Lesson 1Chapter 2, Lesson 1
Warm-Up QuestionsWarm-Up Questions
CPS Questions 1 - 2CPS Questions 1 - 2
Note for teacher: Use “Pick a Student” button in CPSNote for teacher: Use “Pick a Student” button in CPS
Key to the Future
Lesson 1: Avoiding the Credit TrapLesson 1: Avoiding the Credit Trap
Lesson 2: Insurance for Protecting YourLesson 2: Insurance for Protecting Your ResourcesResources
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
What is Credit and Important Credit TermsWhat is Credit and Important Credit TermsPositive and Negative Aspects of Using CreditPositive and Negative Aspects of Using CreditSources of CreditSources of CreditHow Credit WorksHow Credit WorksUsing Credit ResponsiblyUsing Credit ResponsiblyCredit and Credit Card OptionsCredit and Credit Card OptionsAvoiding Credit Card FraudAvoiding Credit Card FraudConsequences of Deficit SpendingConsequences of Deficit Spending
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
Terry is interested in buying a new cell phone, costing $200. However, he has only $50 in his checking account and $40 in savings. He is considering how to borrow the rest he needs to cover the cost. In a short paragraph, explain which of the In a short paragraph, explain which of the three kinds of credit you might recommend three kinds of credit you might recommend for Terry to get the money he needs: a for Terry to get the money he needs: a retail card, an installment loan, or a retail card, an installment loan, or a layaway plan. layaway plan.
Chapter 2, Lesson 1Chapter 2, Lesson 1Photo courtesy of Shutterstock
Key to the Future
Credit is providing or loaning money with the expectation of future repaymentSome people think that it’s never a good idea to buy things on credit But if you never borrow, you won’t establish a credit rating
Chapter 2, Lesson 1Chapter 2, Lesson 1Photo courtesy of Shutterstock
Key to the Future
Account StatementIncludes how much you charged, borrowed, and paid during the last month
Annual Percentage Rate (APR)Yearly interest rate or finance charge
PrincipalMoney you borrow
Credit RatingAn assessment of how trustworthy you are in paying your bills
Credit BureauA public or private agency that gathers credit information on people
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
Positive Aspects of Using Credit:
Buy something you need, even if you don’t have the money right now
Credit makes purchases more convenient
No need to carry a lot of cashCredit can be useful in
emergencies
Negative Aspects of Using Credit:
Difficulty making your payments
Impulse purchasesMany people make only the
minimum payment
Chapter 2, Lesson 1Chapter 2, Lesson 1 Photo courtesy of Shutterstock
Key to the Future
Charge account
Credit card
Charge CardInstallment loanLayaway plan
Chapter 2, Lesson 1Chapter 2, Lesson 1Photo courtesy of Shutterstock
Key to the Future
APR: 18% APR: 18% iPad® Purchase for $650iPad® Purchase for $650Minimum Payment: 10% or $65Minimum Payment: 10% or $65Balance: $575 with 18% interest ($103.50)Balance: $575 with 18% interest ($103.50)The interest will continue to accumulate as The interest will continue to accumulate as long as the balance remains unpaidlong as the balance remains unpaidKnow the interest rateKnow the interest ratePay more than minimumPay more than minimum
Chapter 2, Lesson 1Chapter 2, Lesson 1 Photo courtesy of Shutterstock
Key to the Future
Learning Check QuestionsLearning Check Questions
CPS Questions 3 - 4CPS Questions 3 - 4
Note for teacher: Use “Pick a Student” button in CPSNote for teacher: Use “Pick a Student” button in CPS
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
On the handout provided, complete the On the handout provided, complete the worksheet to calculate finance charges for worksheet to calculate finance charges for various scenarios.various scenarios.
Be prepared to share your answers with the Be prepared to share your answers with the class.class.
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
Pay all your bills on timePay all your bills on timeDon’t think of a credit card as extra cashDon’t think of a credit card as extra cashNever borrow more than your budget allowsNever borrow more than your budget allows
Never borrow more than 20% of net incomeNever borrow more than 20% of net incomeAlways pay your other monthly bills on timeAlways pay your other monthly bills on timeLimit yourself to no more than two credit Limit yourself to no more than two credit cardscards
Chapter 2, Lesson 1Chapter 2, Lesson 1 Photo courtesy of Shutterstock
Key to the Future
Learning Check QuestionsLearning Check Questions
CPS Questions 5 – 6CPS Questions 5 – 6
Note for teacher: Use “Pick a Student” button in CPSNote for teacher: Use “Pick a Student” button in CPS
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
This think-pair-share activity will allow This think-pair-share activity will allow students to explore smart credit students to explore smart credit management.management.
Students may use the LE-300 textbook to Students may use the LE-300 textbook to research credit do’s and don’ts.research credit do’s and don’ts.
Be prepared to share your answers with the Be prepared to share your answers with the class.class.
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
Applying for a Credit Card1. You must be 18 years old2. Steady employment3. Checking or savings account4. History of paying bills on time5. Income that exceeds expenses6. Permanent address
Company has 30 days to respond
Chapter 2, Lesson 1Chapter 2, Lesson 1 Photo courtesy of Shutterstock
Key to the Future
The Truth in Lending Act requires a company to disclose the following:
Annual FeeAnnual Percentage Rate (APR)Grace PeriodFinance Calculation MethodOther transaction fees
Make sure you read the disclosure box fine print
Chapter 2, Lesson 1Chapter 2, Lesson 1 Photo courtesy of Shutterstock
Key to the Future
Character:Character: Are you reliable? Are you reliable? Do you pay your bills on time?Do you pay your bills on time?
Capacity:Capacity: Is your income Is your income enough to pay off the debt? enough to pay off the debt? Do you have a job? Do you Do you have a job? Do you have other debts?have other debts?
Collateral:Collateral: Do you have Do you have enough assets? A car? A enough assets? A car? A savings account?savings account?
Chapter 2, Lesson 1Chapter 2, Lesson 1 Photo courtesy of Shutterstock
Key to the Future
Learning Check QuestionsLearning Check Questions
CPS Questions 7 – 8CPS Questions 7 – 8
Note for teacher: Use “Pick a Student” button in CPSNote for teacher: Use “Pick a Student” button in CPS
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
Read the article provided in the handout on Read the article provided in the handout on establishing and using credit.establishing and using credit.
Answer the questions following the article.Answer the questions following the article.
Be prepared to share your answers with the Be prepared to share your answers with the class.class.
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
Borrow a small amount of money from a bank and pay it back quicklyIf you have a savings account, use it as collateral for your first loanApply for a credit card or charge account at a local businessHave someone cosign your loanPurchase something on the installment plan
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
A A credit bureaucredit bureau tracks every time you apply for tracks every time you apply for credit, your payment history and late fees that are credit, your payment history and late fees that are assessed if you miss a paymentassessed if you miss a paymentA A credit score credit score is a rating that helps lenders decide is a rating that helps lenders decide whether and/or how much credit to approve to a whether and/or how much credit to approve to a borrowerborrowerThree main credit bureaus:Three main credit bureaus:
Trans UnionTrans UnionExperianExperianEquifaxEquifax
Chapter 2, Lesson 1Chapter 2, Lesson 1 Photo courtesy of Shutterstock
Key to the Future
Chapter 2, Lesson 1Chapter 2, Lesson 1
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Key to the Future
Always sign a new credit card right awayAlways sign a new credit card right awaySave your receipts and compare them with the Save your receipts and compare them with the account statement account statement Never give out a credit card number on the Never give out a credit card number on the phonephoneUse secure Internet sites for online purchasesUse secure Internet sites for online purchasesDestroy any preapproved credit offers you Destroy any preapproved credit offers you receive in the mailreceive in the mailDestroy any old or canceled credit cardsDestroy any old or canceled credit cards
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
Federal Law protects youFederal Law protects youContact the credit card company Contact the credit card company immediatelyimmediatelyKeep a record of all your account numbers Keep a record of all your account numbers and contact informationand contact information
Photo courtesy of ShutterstockChapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
Stop borrowing moneyStop borrowing money
Carry just enough cash to get through the dayCarry just enough cash to get through the day
Cut expenses Cut expenses
Talk to your creditors and Talk to your creditors and work out a payment schedulework out a payment schedule
Learn from your mistakesLearn from your mistakes
Chapter 2, Lesson 1Chapter 2, Lesson 1 Photo courtesy of Shutterstock
Key to the Future
BankruptcyBankruptcyChapter 7Chapter 7
Allows you to erase most of your debtAllows you to erase most of your debt
Chapter 13Chapter 13Allows you to set a plan Allows you to set a plan
to repay debts over 5 years to repay debts over 5 years or lessor less
Chapter 2, Lesson 1Chapter 2, Lesson 1 Photo courtesy of Shutterstock
Key to the Future
Learning Check QuestionsLearning Check Questions
CPS Questions 9 – 10CPS Questions 9 – 10
Note for teacher: Use “Pick a Student” button in CPSNote for teacher: Use “Pick a Student” button in CPS
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
Use the internet to compare different credit Use the internet to compare different credit card offers.card offers.
On the worksheet provided, record the On the worksheet provided, record the different credit card offers that you located.different credit card offers that you located.
Be prepared to share your answers with the Be prepared to share your answers with the class.class.
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
What is Credit and Important Credit TermsWhat is Credit and Important Credit TermsPositive and Negative Aspects of Using CreditPositive and Negative Aspects of Using CreditSources of CreditSources of CreditHow Credit WorksHow Credit WorksUsing Credit ResponsiblyUsing Credit ResponsiblyCredit and Credit Card OptionsCredit and Credit Card OptionsAvoiding Credit Card FraudAvoiding Credit Card FraudConsequences of Deficit SpendingConsequences of Deficit Spending
Chapter 2, Lesson 1Chapter 2, Lesson 1
Key to the Future
Chapter 2, Lesson 1Chapter 2, Lesson 1
Note for teacher: Use “Pick a Student” button in CPSNote for teacher: Use “Pick a Student” button in CPS
Review QuestionsReview Questions
CPS Questions 11 - 12CPS Questions 11 - 12
Key to the Future
We’ll learn about We’ll learn about insurance for insurance for protecting your protecting your resourcesresources
Photo courtesy of ShutterstockChapter 2, Lesson 1Chapter 2, Lesson 1
