2. Financial Service Providers SELECT YOUR OWN FINANCIAL SERVICE PROVIDER 1©2012 National Endowment for Financial Education | Lesson 5-4: Financial Service Provider

3. Preview Today we will answer these questions: Where can I cash my paycheck? What is the difference between a bank, credit union, and check cashing business? What do I need to know about using banking services? How do I decide where to do my banking? Use what you learn today to select a financial service provider. 2©2012 National Endowment for Financial Education | Lesson 5-4: Financial Service Provider

4. What’s the Difference? (SG pgs. 26-29) BankCredit Union Check-Cashing Business Grocery StorePawnshop ©2012 National Endowment for Financial Education | Lesson 5-4: Financial Service Provider3

5. Read the Fine Print Find at least 5 fees and when/where/why those fees are charged. Do you think the fees and fee conditions are reasonable? Be prepared to share your findings with the class. ©2012 National Endowment for Financial Education | Lesson 5-4: Financial Service Provider4 Activity 5.6: What Do They Offer?

6. Payday Loan Customer leaves post-dated check with lender – Fill out application – Leave a check to cover principal (amount borrowed) and fee – Must be employed and must have bank account – Must be at least 18 years old Customer receives borrowed amount Customer decides options by due date: – Instruct lender to deposit post-dated check – Pay cash and reclaim post-dated check – Renew loan Customer pays fees – High interest – Additional fees for “bounced” check ©2012 National Endowment for Financial Education | Lesson 5-4: Financial Service Provider5

7. Task: PayDay Lending What are other options rather than using payday loans? ©2012 National Endowment for Financial Education | Lesson 5-4: Financial Service Provider6 PrincipalTimeInterestAPRTotal Owed $500 (rent)2 weeks15%390%$575 $300 (car loan)4 weeks12%156%$336 $1,000 (household and credit card bills) 2 weeks10%260%$1,100 PrincipalTimeInterestAPRTotal Owed $500 (rent)2 weeks15%390%$575 $300 (car loan)4 weeks12% $1,000 (household and credit card bills) 2 weeks10% PrincipalTimeInterestAPRTotal Owed $500 (rent)2 weeks15% $300 (car loan)4 weeks12% $1,000 (household and credit card bills) 2 weeks10%

8. Services That Matter Life Style In-person or ATM deposits and withdrawals Online or mobile banking Convenient hours Convenient location Number of branch locations Other services (overdraft, automatic savings programs, alerts/reminders, etc.) Fees and User Requirements Minimum opening deposit Required monthly balance Overdraft fees ATM fees Penalties and withdrawal limitations Monthly maintenance fee Interest rates ©2012 National Endowment for Financial Education | Lesson 5-4: Financial Service Provider7

9. Reflection Where do you keep your money now and why? Is it safe? Is it growing? Can you track it? ©2012 National Endowment for Financial Education | Lesson 5-4: Financial Service Provider8