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Credit

Credit. Good morning! 3/7/13. Take out you “ Budget ” Notes and respond to the following: Do you have one of these?? Write a list of 10 words you think of when you see these symbols. Credit. Credit can be your best friend forever or your worst enemy ever!

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Credit

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  1. Credit

  2. Good morning! 3/7/13 • Take out you “Budget” Notes and respond to the following: • Do you have one of these?? • Write a list of 10 words you think of when you see these symbols.

  3. Credit • Credit can be your best friend forever or your worst enemy ever! • Why is it important to analyze the costs and benefits of using credit? • BFF: benefits! • Use it for emergency situations • Purchase valuable assets (car; home;edu) • Rewards • WEE; hindrances! • Spend more $$ than you can afford to pay back • Reduces ability to make purchases or save money in the future • Damage credit… cannot borrow in the future • Bankruptcy!!

  4. Hello! • Take out your credit card stuff! • Calculate 5% of $240 • Calculate 1.5% of 148 • If you pay your credit card balance off every month will you have to pay finance charges? • Turn 17% APR into the monthly finance charge.

  5. Objectives • Today and tomorrow we will: • Calculate interest payments, minimum balances and the cost of credit; • Develop and apply criteria for determining when the use of credit is appropriate.

  6. Guided notes • Use the guided notes to write definitions/concepts: • Define credit • Credit is the ability to obtain goods or services before paying for them, based on a promise to pay later. Thus, each time a person uses credit, he or she is in effect borrowing money. • Define revolving credit • It is credit that is available up to a limit and automatically renewed as debts are paid off or paid down. People who use revolving credit often make partial payments on their unpaid balances at regular intervals. For example, credit-card accounts offer revolving credit to credit-card users, many of whom make partial payment on their balance each month.

  7. Activity 1 • Read activity one- JJ… we will use the guided notes to complete Justin’s credit card worksheet… • You will be using the half-sheet which tells you the steps of completing the balance sheet

  8. Pay-off time 6 months Which time period do you think is the amount of time that it will take Justin to pay off his credit-card balance if he did not make any new purchases and paid the minimum balance each moth? 12 months 18 months It would take him 23 months if he paid $55 per month… Payback amount= $1,226.88 Total purchases= $1,051.67 Cost of credit (borrowing)= $175.21 24 months 30 months

  9. Problems arise when… • People have high monthly payments • They can’t affot to buy things they want to buy now but cannot aford to save money because so much of their income is going to pay for past purchases (credit card bills) • Sometimes people fall behind and fail to make monthly payments on unpaid balances; therefore- finanacial penalties which ADD to their debt! • Too many debts lead to possible bankruptcy which severely limits their capacity to borrow in the future

  10. Good credit time… or not… • What if you were driving on the I-8 around midnight and your car breaks down. You are pretty far from home. You use your cell phone to call an emergency auto-repair service. The service rep. tells you tat a service will cost $50, plus the cost of any parts and labor theat are necessary for you ddriving again. You have $7.75 in your pocket. Should you use a credit card?

  11. Hello 3/11/13 • Take out your notes from last week and complete the following: • 1. Draw a person and describe them assuming they are a bad/poor candidate for credit use • 2. Draw another person describing them, assuming they are a good candidate for credit use

  12. Objective • Given 7 scenarios, SWBAT • 1. identify whether or not candidates should use credit given their personal situation; • 2. Justify their answer in at least 2 sentences • Given the brochure rubric, SWBAT • Utilize the vocabulary words; • Identify the 2 principles of financial planning • Draw a sample budget and • List step-by-step instructions for calculating credit card finance charges

  13. Should you borrow Activity 2 • On a ½ sheet discuss with your neighbor whether or not the specific person is fit to use credit; • 1 sentence stating whether they should or should not use credit • Justify your answer in at least 2 sentences • (7 scenarios- at least 3 sentences per scenario)

  14. Brochure • Begin to work on brochure based on rubric • **** Vocabulary should be used throughout the brochure in explanations**** • Due Wed OR Fri • **You are simply explaining the notes from last week touching on the importance of • -goals; budgets; credit; and paying attention to finance charges

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