Personal Financial Literacy: Debt Management and Credit Worthiness Essential Question: How can creating and managing a budget help someone make better financial decisions? How can debt management and credit worthiness impact an individual’s ability to become a responsible consumer and borrower?

Terms Deposits Withdrawals Transfers Overdraft fees Automated Transactions Bounced Checks Loan Debt

Personal Debt Your debt is the money you owe to creditors. People build debt by taking loans for homes, cars, education, starting a new business, etc. Credit Cards=small loan Every loan will include interest rate.

Personal Debt Cont’d Building debt is not always bad. Most people will need to take a loan of some kind during their lives. Banks are more willing to offer loans, or low interest rates, to people with a good credit history/credit score. You can build a good history/score by paying back your debts on time or early. PAYING BILLS on time every time

Your Responsibilities Borrow only what you can repay Read and understand the credit contract (Fine Print) Pay debts promptly Notify creditor if you cannot meet payments Report lost or stolen credit cards promptly Never give your card number over the phone unless you initiated the call or are certain of the caller’s identity

Reading a Credit Card Statement

Elements of your Credit Report