1. The implications of borrowing
Unit 2 Topic 11
Kahoot

2. The implications of borrowing
No.
Question A B C
Ans 1
If we cannot afford to pay for an item outright, using a credit card is likely to be a cheaper way of purchasing the item than taking out a personal loan.
True
False 2
The money to support those with heavy debt problems usually comes from:
Central government
Local authorities
Charities 3
Which of the following loans is the riskiest for someone on a tight budget?
A medium term, fixed rate loan
A short term, variable rate loan
A long term, variable rate loan 4
Which of the following forms of payment encourage people to spend more than they otherwise might?
Cash
Debit card
Credit card 5
If a credit card has an annual rate of interest of 18%, how much is the monthly interest rate charged? [2]

3. Answers No. Question A B C 1
If we cannot afford to pay for an item outright, using a credit card is likely to be a cheaper way of purchasing the item than taking out a personal loan.
True
False 2
The money to support those with heavy debt problems usually comes from:
Central government
Local authorities
Charities 3
Which of the following loans is the riskiest for someone on a tight budget?
A medium term, fixed rate loan
A short term, variable rate loan
A long term, variable rate loan 4
Which of the following forms of payment encourage people to spend more than they otherwise might?
Cash
Debit card
Credit card 5
If a credit card has an annual rate of interest of 18%, how much is the monthly interest rate charged? [2]
Marks awarded as stated below
18% divided by 12 months [1]
1.5% [1]

4. Task
Using the information to the right and a calculator, work out the answers to the questions.
5 minutes

5. Task
Go to the IFS website and take a look at the topic test for topic 11 to further revision the main points. Make revision materials. 10 minutes

6. Key Terms for Topic 11
Assets Bankruptcy Order Consumer Borrowing County Court Judgement Credit Reference Agencies Debt Consolidation Debt Relief Order Individual voluntary arrangement Insolvency Payment Default Recession
On your whiteboards or books, write down a definitions for these key terms. EXT: Can you give examples of each? 10 minutes

7. Answers
Credit reference agencies – companies that collect data on the conduct of people’s financial accounts.
Insolvency – when an individual’s debts exceed their assets and they cannot meet the loan repayments on the debt; they are said to be
‘insolvent’.
Assets – personal possessions and investments that have a value if sold
Bankruptcy order – a court order to recover debts from an insolvent person, under the supervision of a trustee in bankruptcy.
Debt relief order – an arrangement for someone with debts not exceeding £20,000, limited assets and little disposable income to write off the debts after 12 months.
Payment default – when the borrower fails to make payments on a
credit agreement.
Consumer borrowing – borrowing by members of the public rather than the government
Recession – a period of at least six months when the amount of goods and services that a country is producing is shrinking. This has wide-scale negative effects on the economy.
Debt consolidation – rolling up existing debts into one new loan
Individual voluntary arrangement (IVA) – an agreement between a
debtor and their creditors to pay some of the debts over a set term, usually five years.
County court judgment (CCJ) – a court order for the repayment of a debt.

8. GCSE IFS Finance – Unit 2 Topic 11
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GCSE IFS Finance – Unit 2 Topic 11