LESSON 12 CREDIT YOUR BEST FRIEND OR YOUR

LESSON 12 CREDIT: YOUR BEST FRIEND OR YOUR WORST ENEMY? LEARNING, AND INVESTING FOR A NEW GENERATION ©COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

SLIDE 12. 1 LESSON 12 –CREDIT: YOUR BEST FRIEND OR YOUR WORST ENEMY? 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. LEARNING, AND INVESTING FOR A NEW GENERATION ©COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY

SLIDE 12. 2 LESSON 12 –CREDIT: YOUR BEST FRIEND OR YOUR WORST ENEMY? Answers to Worksheet for Justin Jabowski January Purchases Minus minimum payment February $235. 00 11. 75 Unpaid balance 223. 25 Purchases 157. 00 Previous balance 223. 25 Plus finance charge Total owed Minus minimum payment Unpaid balance LEARNING, AND INVESTING FOR A NEW GENERATION ©COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY 3. 35 383. 60 19. 18 364. 42

SLIDE 12. 3 LESSON 12 –CREDIT: YOUR BEST FRIEND OR YOUR WORST ENEMY? Answers to Worksheet for Justin Jabowski March Purchases 270. 00 Previous balance 364. 42 Plus finance charge 5. 47 Total owed 639. 89 Minus minimum payment April 31. 99 Unpaid balance 607. 90 Purchases 490. 00 Previous balance 607. 90 Plus finance charge Total owed 9. 12 1, 107. 02 Minus minimum payment Unpaid balance 55. 35 1, 051. 97 LEARNING, AND INVESTING FOR A NEW GENERATION ©COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY