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					The True Cost of Credit Cards                                                  Credit
In-class/Online Lesson                                                         page 1

                           Money Talks In-class/Online Lesson Overview

Money Talks goes one step beyond the traditional classroom lesson to bring financial matters
to life through Internet-based lessons. When teachers use blended in-class/online lessons,
students increase their depth of understanding of financial literacy topics. Students explore
the financial hardships of characters in a series of humorous Money Talks picture stories and
see how the characters reach (or in some cases don’t reach) their financial goals. Students
also reflect on their own goals and use the Internet-based activities to shed light on the reality
of their financial futures.

It is our hope that students become motivated to take an active role in managing their money,
and that they share online resources with their friends and families.

STEP 1: Warm up to the topic of credit

The following two activities are taken from the Money Talks beginner/low-intermediate level
credit lesson. If you have already completed this lesson, do a quick review of the following
activities. The activities are appropriate for all language levels as they allow students to warm
up to the topic of saving money.

    Activity 2-1: What is credit?

    To warm-up to the topic of credit, draw a picture of a credit card on the board, or use
    realia - one of your own. Ask some leading questions like:

           Who in the class has a credit card?
           Is it a "debit" and/or "credit" card? Ask if anyone knows what is the difference -
            make sure students understand the difference. To further describe the difference
            you can say that debit card says "take the money from my bank account now".
            Credit card says "I promise to pay when I get my credit card bill."
           debit card - amount purchased is taken immediately from your bank account
           credit card - amount purchased is paid on next monthly bill.
           Where do you get a credit card? (banks, stores, offers in the mail)
           How do you get a credit card?
           Can anyone get a credit card? Why? Why not?
           Are credit cards good? Why?
           Are credit cards bad? Why?

    Also ask the question, is it important to pay your bills on time? Why?Answers may differ,
    but be sure students understand that paying all bills on time helps to get a good credit           All Levels                 In-Class/Online Lessons
The True Cost of Credit Cards                                                   Credit
In-class/Online Lesson                                                          page 2

record. With a good credit record, it is easier to get a loan for a car, or a house (mortgage).
You don't need to go into much detail, just try to draw attention to the topic.

    Activity 2-2: Bad Credit - No Loan! Picture Story
     Overhead 2-A: Bad Credit - No Loan! Picture Story
     Worksheet 2-2: Bad Credit! No Loan Picture Story and Activities

In this picture story, students meet Ali and his family. Ali is distraught because he can’t pay
his credit card bills. In his frustration he gives up, tears up his bills and throws them in the
trash. Soon after, he and his pregnant wife see the house of their dreams. When they talk to
a mortgage lender they find out they have very bad credit. Ali comes up with a disciplined
long term plan for improving his credit. After time, he and his wife (and children) buy their first
home and enjoy it with their growing family.

Before handing out Worksheet 2-2, show Overhead 2-B. Then, with your direction, have
students complete Worksheet 3-2. Please review the Money Talks Picture Story Best
Practices document linked here to learn how to conduct interactive activities that get your
students engaged in the picture story and in the topic while using all four language skills,
listening, speaking, reading, and writing.

STEP 2: Discuss the hidden costs of credit cards - interest

Talk again about Ali and his credit card debt. Show the picture story picture of Ali and his
credit card bill of $1,250 (you can brainstorm what he bought for this amount – a TV, a
washing machine, a trip) and write this amount on the board. Ask students level appropriate
questions like:
            “How much does Ali need to pay?”
            “How much money does he have?” (We don’t really know this, but not enough
               to pay the bill)
            “Does he need to pay it all, or can he pay a little every month?”
            “If he pays a little every month, is that a problem?”
            “In the end, does he pay more money?”

Use these questions to generate a discussion about interest rates. Explain that interest rates
are a fee (extra money) you pay to the credit card company if you don’t pay the full amount
every month.

STEP 3: Demonstrate Ali’s real cost of credit

Explain, in level appropriate language, that you are going to use a web site (see Step 6) to
find out how much Ali has to pay, with interest. Give an example that Ali has a 10% annual           All Levels                  In-Class/Online Lessons
The True Cost of Credit Cards                                                 Credit
In-class/Online Lesson                                                        page 3
interest rate (this is “APR” but you don’t need to go into this concept) on his credit card and
that he decides to pay only the minimum, $20 a month, to pay it off.

Write the numbers from the chart below (these were generated from the Practical Money
Skills calculator results) plugging in Ali’s numbers. Write just the numbers (not the words) and
talk through the scenario explaining what each number represents, in level appropriate
language. Without going into too much detail, emphasize that Ali ends up paying about
$1,700 for his $1,250 bill.

Talk about the importance of paying your bill every month, or paying as much as possible for
the fewest number of months to avoid paying too much for credit card purchases.

STEP 4: Allow students to try a couple scenarios
Overhead: True Cost of Credit Cards Overhead
Worksheet: True Cost of Credit Cards In-class/Online Worksheet

To prepare students to complete their own scenarios online, help them to understand the
prompts they will see on the online calculator in level appropriate language.          All Levels                 In-Class/Online Lessons
The True Cost of Credit Cards                                                   Credit
In-class/Online Lesson                                                          page 4

Questions from web site                                 Simplified way to solicit
                                                        answer for lower-level students

- Total Purchase Amount?                                - how much is bill?
- Credit Card APR                                       - interest rate?
- Monthly Payment                                       - how much every month?

Show the True Cost of Credit Cards Overhead and walk through an example. Then, distribute
the True Cost of Credit Card In-class/Online Worksheet, one per pair. Have pairs circle an
item they want to buy and brainstorm the cost of it, as well as different interest rates and
payment scenarios. Be sure that each pair picks only one item with two pay back scenarios
for comparison.

STEP 5: Complete online calculator activity

Before class, give the calculator a try by going to Using the
tabs at the top of the page, click on “Calculators” then “Credit Cards”. Imagine what students
might encounter and be prepared for any difficulties that might arise when they access the
site. You may want to have the web site calculator ready on all computers, if students do not
have experience using the computer and Internet.

Have students watch you go through the example in Step 2 so they can see how to navigate
the web site. You can do this in class if you have a way for students to see what you are
doing (via LCD panel or Smart Board) or have them gather around and watch you do it on a
PC in small groups of 4-5 students. Demonstrate how to record the results onto their Online
Worksheet (second box).

When students sit with their partner at a computer, as a warm-up, have students plug in the
same numbers to make sure all pairs come up with the same (correct) results.

Next, have students plug in their own examples. Have them copy the explanation the
calculator provides onto their worksheet for their two examples. They will need these results
for the wrap-up in-class activity, so be sure to circulate and check students’ work and the
feasibility of their results.

STEP 6: Wrap-up: Practice language skills through results sharing

In class, to get students talking about their findings and their financial goals, have them
complete a “conversation grid” (also called an “information grid”) to share the results of the
online calculator activity. (For information on how to conduct a conversation grid activity, go
to the Money Talks document ESOL Techniques: Best Practices and click on the link that
describes various teaching techniques. Scroll down to the sixth page to learn about          All Levels                  In-Class/Online Lessons
The True Cost of Credit Cards                                                     Credit
In-class/Online Lesson                                                            page 5

conducting a conversation grid activity.) Create a grid based on your students’ language level
and grammar focus (you can either make copies before class, or have students copy a grid
that you write on the board).

An example for the beginner/low-intermediate level could be (note: add several more rows):
What’s your name?                             What did you buy?    What was the finance

An example for the high-intermediate/advanced level could be (note: add several more rows):
What’s your name?         What did you buy?       What was the     What was the total
                                                  interest rate?   finance charge?

Practice the questions and possible answers as a whole group activity. Then have students
circulate around the room to collect answers from their classmates. You could follow up this
activity with a wrap-up where you ask individual students to look at their chart and tell you for
example “Who bought a television?” or ask the whole class “What was Maria’s finance

As an extension activity (in class or for homework) students can write sentences using
information from their grids. For example,

For the beginner/low-intermediate level:
“Carlos bought a television.”
“Juan bought furniture.”

For the intermediate/advanced level:
“Chang, Ricardo and Elena bought a television.”
“Ricardo had the highest finance charge.”                All Levels              In-Class/Online Lessons

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