LEARNING, EARNING, AND INVESTING FOR A NEW GENERATION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

CREDIT: YOUR BEST FRIENDOR YOUR WORST ENEMY?

LESSON 12

LEARNING, EARNING, AND INVESTING FOR A NEW GENERATION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Credit Definitions

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.

LESSON 12 – CREDIT: YOUR BEST FRIEND OR YOUR WORST ENEMY?

SLIDE 12.1

LEARNING, EARNING, AND INVESTING FOR A NEW GENERATION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Answers to Worksheet for Justin Jabowski

January Purchases $235.00

Minus minimum payment 11.75

Unpaid balance 223.25

February Purchases 157.00

Previous balance 223.25

Plus finance charge 3.35

Total owed 383.60

Minus minimum payment 19.18

Unpaid balance 364.42

LESSON 12 – CREDIT: YOUR BEST FRIEND OR YOUR WORST ENEMY?

SLIDE 12.2

LEARNING, EARNING, AND INVESTING FOR A NEW GENERATION © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

Answers to Worksheet for Justin Jabowski

LESSON 12 – CREDIT: YOUR BEST FRIEND OR YOUR WORST ENEMY?

March Purchases 270.00

Previous balance 364.42

Plus finance charge 5.47

Total owed 639.89

Minus minimum payment 31.99

Unpaid balance 607.90

April Purchases 490.00

Previous balance 607.90

Plus finance charge 9.12

Total owed 1,107.02

Minus minimum payment 55.35

Unpaid balance 1,051.97

SLIDE 12.3