1. Credit: Your best friend or worst Enemy?

2.  Calculate interest payments, minimum balances, and the cost of credit  Develop and apply criteria for determining when the use of credit is appropriate. SWBAT

3. Credit  The ability to obtain goods and services before paying for them, based on a promise to pay later.  Individuals who use credit are borrowing money. Revolving credit  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.  Credit-card accounts offer revolving credit to credit-card users. Definitions

4.  Read part 1, and fill in the blanks as you go.  Complete the back of the worksheet Handout

5. Answers to Worksheet for Justin Jabowski JanuaryPurchases$235.00 Minus minimum payment11.75 Unpaid balance223.25 FebruaryPurchases157.00 Previous balance223.25 Plus finance charge3.35 Total owed383.60 Minus minimum payment19.18 Unpaid balance364.42 L ESSON 12 – C REDIT : Y OUR B EST F RIEND OR Y OUR W ORST E NEMY ? S LIDE 12.2

6. Answers to Worksheet for Justin Jabowski L ESSON 12 – C REDIT : Y OUR B EST F RIEND OR Y OUR W ORST E NEMY ? MarchPurchases270.00 Previous balance364.42 Plus finance charge5.47 Total owed639.89 Minus minimum payment31.99 Unpaid balance607.90 AprilPurchases490.00 Previous balance607.90 Plus finance charge9.12 Total owed1,107.02 Minus minimum payment55.35 Unpaid balance1,051.67 S LIDE 12.3

7.  6 Months?  12 Months?  18 Months?  24 Months?  30 Months? Bonus Question How long will it take?

8.  It will take 24 months!  Justin will pay $1,226.88  Total interest paid $175.21

9.  “It is midnight, and your car breaks down on I-25 you are far from home. You use your cell phone to call an emergency auto repair service. The service visit will cost $50, plus the cost of any parts and labor that are needed to get you driving again. You have $7.57 in your pocket. Should you use credit? Scenario

10.  15 minutes to work in small groups. More Scenarios

11.  Calculate interest payments, minimum balances, and the cost of credit  Develop and apply criteria for determining when the use of credit is appropriate. Are you now able to…