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The Basics of Credit


  • Develop an understanding of credit
  • Discuss credit cards and the costs associated with having one
  • Consider the importance of maintaining records and building a good credit history

Suggested Activities

  • What is credit? What are different types of credit?
  • What are the upsides of having a credit card?
    • Convenient way to simplify bill paying
    • Don't have to carry large amounts of cash
    • Shop by telephone or over the Internet
    • Enables people to pay for items as part of their living expenses as opposed to waiting until they can afford to make the purchase.
    • Often required for making a reservation
  • What are the downsides of having a credit card?
    • You can over-commit yourself and potentially lose your property
    • If you regularly charge more than you can afford to pay, you pay finance charges
    • They can be stolen and misused
  • Use a drawing of a credit card to talk about what the information on the card means
    • Account number
    • Customer service number
    • Holographic image
    • Magnetic strip
    • Expiration dates
  • Discuss costs associated with credit cards
    • Annual fees
    • Finance charges
    • Late payment fee
    • Over-your-limit fee
  • Discuss the importance of record keeping and developing a sound credit history
    • Lost or stolen cards
    • Purchases you didn't make and billing errors
    • Defective merchandise
    • Credit reports

Tips for using The Home Zone to discuss the basics of credit

    Go to Cool Stories:
  • Watch "Home Ownership," which discusses the difference between owning and renting a home, some of the advantages of owning a home, and the concept of loans.
  • Watch "Mortgages," which discusses what a mortgage is and the value of having good credit to facilitate getting one.
    Go to Brain Food:
  • Visit "Mindbuilder, Loans, Credit, and Credit Records" for a discussion about loans, credit cards, and credit reports.
  • Visit "MindBuilder, The Value of Home Ownership" for a discussion of home ownership and getting a loan.
  • Visit "MindBuilder, What is a Mortgage?" for a discussion of mortgages and exercises in calculating loan payments.
    Go to Glossary:
  • Terms used in The Home Zone are defined here, including terminology related to credit and loans.
    Go to Game Center:
  • Play "HomeBuilder," which reinforces a variety of concepts addressed in The Home Zone.

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