FINANCIAL LIT - MODULE 04 - CREDIT & DEBT

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Iowa Core Standards: Iowa CTE Standards:
SS-FL.9-12.18. Analyze the cost benefits of different types 7.1.6 Explain the purposes and importance of credit
of credit and debt
SS-FL.9-12.20. Investigate strategies to avoid and manage 7.3.6 Calculate the cost of credit
debt effectively
SS-FL.9-12.19. Summarize a borrower’s rights and 7.3.7 Demonstrate the wise use of credit
responsibilities
7.3.12 Control debt.

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Getting Started:
Sadly as we have learned, borrowing money is so ingrained in our culture that people can’t imagine life without it. We’ve
all been taught that debt is a financial tool used to get the things we want. Using debt as a “tool” displays impatience
and immaturity in money management. Debt limits how we spend our money. The truth is, you will need to build a
credit score but how do you do that without incurring a bunch of debt?

LESSON 4-1: WHAT IS CONSUMER CREDIT AND DEBT?

Learning Target(s):
• Understand the advantages and disadvantages of using consumer credit.
• Understand the consequences of making purchases on credit vs. paying cash
• Determine the ‘real’ cost of credit by calculating what interest will cost.
DATE Activities / Resources / Assignments
In Class Activities:
(1) Video and Journal: Video 4-1 Debt Product Not Privilege (20:30 min) VIDEO
Video 4-7 Myth Credit Cards (13:41 min) VIDEO

Journal Questions 4-1: FILE

- Explain why Dave says that ‘Debt is a Product, Not Privilege’ and actually a product that is
bought and sold.
- Explain the advantages and disadvantages of credit. Are there good types of credit and bad types
of credit?
- Explain what Dave means when he says, "The borrower is slave to the lender."
- What are some differences of using a credit card vs. using a debit card
- Go over the pros and cons of running your debit card as a credit vs. running it as a debit.
- Talk about the different ways people/teens are targeted and convinced they need credit cards.
- Why are credit card companies so willing to give students credit cards?

(2) Lecture: Product Not a Privilege Credit Cards

(3) Discussion: Journal Questions

(4) Activity: Hidden Costs of Credit Cards FILE

(5) Activity: Making the Minimum FILE

(6) Activity: EVERFI Module - Credit and Debt

LESSON 4-2: DEBUNKING THE CREDIT MYTHS
Learning Target(s):
• Evaluate and refute the myths associated with debt.
• Identify the most cost-effective option for purchasing a car and a home.
DATE Activities / Resources / Assignments
In Class Activities:
(1) Video and Journal: Video 4-2 Loaning to Others or Cosigning (4:08 min) VIDEO
Video 4-3 Cash Advance (4:16 min) VIDEO
Video 4-4 Myth the Lottery (3:15 min) VIDEO

Journal Questions 4-2A: FILE

- Describe some of the problems with loaning money to a friend or relative.
- What does it mean if the person applying for a loan needs a co-signer? And why should
you think very seriously about before co-signing for someone.
- What do you think you will need a co-signer for?
- Are cash advances a good way to get money if you need it fast? Explain why or why not?
- What does Dave’s say about playing the lottery and gambling? Do you agree or disagree
with him? Explain.

(2) Lecture: Loaning Money Cash Advances Playing the Lottery

(3) Discussion: Journal Questions

(4) Activity: Cash Services FILE

(What happens when I can’t get credit or have poor credit and need cash?)
Summary Question Discussion

(5) Project: Realities of Cash Advances and Payday Loans Turn it in HERE

In Class Activities:
(1) Video and Journal:
Video 4-5 Myth Car Payments, Leasing, and Buying New (19:20 min) VIDEO
Video 4-6 Myth 30 Year Mortgage (4:15 min) VIDEO
Video 4-8 Debt Summary (13:17 min) VIDEO
Watch Drive Free Video

Journal Questions 4-2B: FILE

- Explain how Dave’s concept of ‘Drive Free’ works to refute the myth that “You will always
have a car payment”
- How does leasing a car work? And compare the cost of leasing to buying the vehicle. Is it a
good way to drive a car?
- What are some downfalls of purchasing a brand new vehicle on credit?
- Which one is better and explain why: adjustable rate mortgage or a fixed rate mortgage
- Explain why it is better to take out a 15-year mortgage instead of a 30-year mortgage.

(2) Activity: EVERFI Module - Consumer Skills

(3) Lecture: Buying and Leasing a Car Buying a House

(4) Discussion: Journal Questions
 (5) Activity: Drive Free FILE
(6) Activity: True Cost of Buying New FILE

(7) Activity: Rent to Own FILE

(8) Guest Speaker - Clinton National Bank (2 Days)

LESSON 4-3: THE CREDIT SCORE and CREDIT BUREAUS AND IDENTITY THEFT
Learning Target(s):
• Explain how a credit score affects creditworthiness and the cost of credit.
• Understand how to obtain a credit report to monitor your credit score.
• Evaluate ways that debt can negatively affect your financial future and how to overcome personal
debt.
DATE Activities / Resources / Assignments
In Class Activities:
(1) Video and Journal: FL 04 Video - 9 The Credit Score (9:00 min) Module 4 Folder
FL 04 Video - 10 Credit Bureaus and Identity Theft (13:00 min)

Journal Questions 4-3: FILE

- Why is it important to have a credit score?
- How can you protect your credit information? What should you do if you think your
identity has been stolen?
- Explain the difference between a credit report and a credit score. Who are the 3 major
Credit Reporting Agencies and how often can you request a copy of your credit report?

(2) Lecture: Credit Scores

Discussion: Journal Questions AnnualCreditReport.com

(3) Activity: Debt Snowball FILE

REVIEW AND EXAM

(1) Activity: Video Reflections FILE
(2) Activity: Case Studies FILE
(3) Activity: FL 04 - Money In Review (need to get 70% before take exam)

(4) EXAM: Credit& Debt