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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
- 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.