Key to the Future Chapter 2, Lesson 1 Warm-Up Questions CPS Questions Note for teacher: Use Pick a Student button in CPS

Key to the Future Lesson 1: Avoiding the Credit Trap Lesson 2: Insurance for Protecting Your Resources Resources Chapter 2, Lesson 1

Key to the Future What is Credit and Important Credit Terms Positive and Negative Aspects of Using Credit Sources of Credit How Credit Works Using Credit Responsibly Credit and Credit Card Options Avoiding Credit Card Fraud Consequences of Deficit Spending Chapter 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 three kinds of credit you might recommend for Terry to get the money he needs: a retail card, an installment loan, or a layaway plan. Chapter 2, Lesson 1 Photo courtesy of Shutterstock

Key to the Future Credit is providing or loaning money with the expectation of future repayment Some people think that its never a good idea to buy things on credit But if you never borrow, you wont establish a credit rating Chapter 2, Lesson 1 Photo courtesy of Shutterstock

Key to the Future Account Statement Includes how much you charged, borrowed, and paid during the last month Annual Percentage Rate (APR) Yearly interest rate or finance charge Principal Money you borrow Credit Rating An assessment of how trustworthy you are in paying your bills Credit Bureau A public or private agency that gathers credit information on people Chapter 2, Lesson 1

Key to the Future Positive Aspects of Using Credit: Buy something you need, even if you dont have the money right now Credit makes purchases more convenient No need to carry a lot of cash Credit can be useful in emergencies Negative Aspects of Using Credit: Difficulty making your payments Impulse purchases Many people make only the minimum payment Chapter 2, Lesson 1 Photo courtesy of Shutterstock

Key to the Future Charge account Credit card Charge Card Installment loan Layaway plan Chapter 2, Lesson 1 Photo courtesy of Shutterstock

Key to the Future APR: 18% iPad® Purchase for $650 Minimum Payment: 10% or $65 Balance: $575 with 18% interest ($103.50) The interest will continue to accumulate as long as the balance remains unpaid Know the interest rate Pay more than minimum Chapter 2, Lesson 1 Photo courtesy of Shutterstock

Key to the Future Learning Check Questions CPS Questions Note for teacher: Use Pick a Student button in CPS Chapter 2, Lesson 1

Key to the Future On the handout provided, complete the worksheet to calculate finance charges for various scenarios. Be prepared to share your answers with the class. Chapter 2, Lesson 1

Key to the Future Pay all your bills on time Dont think of a credit card as extra cash Never borrow more than your budget allows Never borrow more than 20% of net income Always pay your other monthly bills on time Limit yourself to no more than two credit cards Chapter 2, Lesson 1 Photo courtesy of Shutterstock

Key to the Future Learning Check Questions CPS Questions 5 – 6 Note for teacher: Use Pick a Student button in CPS Chapter 2, Lesson 1

Key to the Future This think-pair-share activity will allow students to explore smart credit management. Students may use the LE-300 textbook to research credit dos and donts. Be prepared to share your answers with the class. Chapter 2, Lesson 1

Key to the Future Applying for a Credit Card 1. You must be 18 years old 2. Steady employment 3. Checking or savings account 4. History of paying bills on time 5. Income that exceeds expenses 6. Permanent address Company has 30 days to respond Chapter 2, Lesson 1 Photo courtesy of Shutterstock

Key to the Future The Truth in Lending Act requires a company to disclose the following: Annual Fee Annual Percentage Rate (APR) Grace Period Finance Calculation Method Other transaction fees Make sure you read the disclosure box fine print Chapter 2, Lesson 1 Photo courtesy of Shutterstock

Key to the Future Character: Are you reliable? Do you pay your bills on time? Capacity: Is your income enough to pay off the debt? Do you have a job? Do you have other debts? Collateral: Do you have enough assets? A car? A savings account? Chapter 2, Lesson 1 Photo courtesy of Shutterstock

Key to the Future Learning Check Questions CPS Questions 7 – 8 Note for teacher: Use Pick a Student button in CPS Chapter 2, Lesson 1

Key to the Future Read the article provided in the handout on establishing and using credit. Answer the questions following the article. Be prepared to share your answers with the class. Chapter 2, Lesson 1

Key to the Future Borrow a small amount of money from a bank and pay it back quickly If you have a savings account, use it as collateral for your first loan Apply for a credit card or charge account at a local business Have someone cosign your loan Purchase something on the installment plan Chapter 2, Lesson 1

Key to the Future A credit bureau tracks every time you apply for credit, your payment history and late fees that are assessed if you miss a payment A credit score is a rating that helps lenders decide whether and/or how much credit to approve to a borrower Three main credit bureaus: Trans Union ExperianEquifax Chapter 2, Lesson 1 Photo courtesy of Shutterstock

Key to the Future Chapter 2, Lesson 1 Having trouble viewing this video? Click HERE to view this video onlineHERE

Key to the Future Always sign a new credit card right away Save your receipts and compare them with the account statement Never give out a credit card number on the phone Use secure Internet sites for online purchases Destroy any preapproved credit offers you receive in the mail Destroy any old or canceled credit cards Chapter 2, Lesson 1

Key to the Future Federal Law protects you Contact the credit card company immediately Keep a record of all your account numbers and contact information Photo courtesy of Shutterstock Chapter 2, Lesson 1

Key to the Future Stop borrowing money Carry just enough cash to get through the day Cut expenses Talk to your creditors and work out a payment schedule work out a payment schedule Learn from your mistakes Chapter 2, Lesson 1 Photo courtesy of Shutterstock

Key to the Future Bankruptcy Chapter 7 Allows you to erase most of your debt Chapter 13 Allows you to set a plan to repay debts over 5 years to repay debts over 5 years or less or less Chapter 2, Lesson 1 Photo courtesy of Shutterstock

Key to the Future Learning Check Questions CPS Questions 9 – 10 Note for teacher: Use Pick a Student button in CPS Chapter 2, Lesson 1

Key to the Future Use the internet to compare different credit card offers. On the worksheet provided, record the different credit card offers that you located. Be prepared to share your answers with the class. Chapter 2, Lesson 1

Key to the Future What is Credit and Important Credit Terms Positive and Negative Aspects of Using Credit Sources of Credit How Credit Works Using Credit Responsibly Credit and Credit Card Options Avoiding Credit Card Fraud Consequences of Deficit Spending Chapter 2, Lesson 1

Key to the Future Chapter 2, Lesson 1 Note for teacher: Use Pick a Student button in CPS Review Questions CPS Questions

Key to the Future Well learn about insurance for protecting your resources Photo courtesy of Shutterstock Chapter 2, Lesson 1