bad credit card online

							The True Cost of Credit Cards In-class/Online Lesson
Money Talks In-class/Online Lesson Overview

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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?

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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

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In-Class/Online Lessons

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

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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

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In-Class/Online Lessons

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

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___________________________________________________________________ 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.

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In-Class/Online Lessons

The True Cost of Credit Cards In-class/Online Lesson
Questions from web site
- Total Purchase Amount? - Credit Card APR - Monthly Payment

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Simplified way to solicit answer for lower-level students

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- how much is bill? - interest rate? - 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 www.practicalmoneyskills.com. 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
www.valrc.org/courses/moneytalks All Levels In-Class/Online Lessons

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

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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 charge?

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 interest rate? What was the total 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 charge?” 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.”

www.valrc.org/courses/moneytalks

All Levels

In-Class/Online Lessons