Objectives
Students will:
- Understand the financial danger credit cards pose.
- Identify negative consequences of using credit cards.
- Identify benefits of not using credit.
- Model successfully the use of a shopping plan that doesn't require the use of credit cards.
- Develop strategies for avoiding the use of credit
Step 1: Lesson Introduction
In the second segment, we learned why it's important to ask for assistance when making purchases, especially if you are uncertain about a particular make or model. We learned that asking for help to get the right product initially can eliminate future hassles with a refund or exchange. In addition, seeking help saves time and helps the consumer to become a more savvy shopper. Another way to be a savvy shopper – though it's not always a popular one – is to avoid credit card debt. Ask students about the credit card habits of friends and family members. Ask them if they have ever used credit cards and, if so, under what circumstances. Have them discuss the pros and cons when using credit.
Share your own credit experiences with them as well. In today's video we'll see why not using credit cards helps people become savvy shoppers.
▶️ Show the video.
⏸️ Stop the video when the "Pause for Discussion" title appears on the screen.
Step 2: Guided Discussion, Part 1
What did Leah do that was NotSmart?
She bought everything, including necessities like groceries, with a credit card. She either did not use or have the cash to cover her purchases.
What happened because Leah was NotSmart?
Leah ended up with a huge number of credit card bills she could not afford. Realizing she could not pay her bills, Leah cried out, "Help me, God." A voice admonished her for overspending and told her what to do about her debt. The sound of the voice terrified her and she immediately shredded the cards.
How could Leah have been MoneySmart?
Have students discuss how Leah could have been MoneySmart in the same situation.
Watch the next part of the video to see one way Leah could have been MoneySmart.
▶️ Start the video again.
⏸️ Stop the video when the "Pause for Discussion" title appears on the screen.
Step 3: Guided Discussion, Part 2
How was Leah Money Smart this time?
She used only cash for her purchases.
What happened because Leah was MoneySmart?
By using cash, she avoided bills she could not afford and visits from a mysterious voice that scared the "bajeebees" out of her.
What can we learn from this?
- Use cash. Credit cards seem like easy money, but the interest charged means you could spend two to three times the original price.
- If you abuse credit cards, a mysterious voice will haunt you.
- You must earn your money before you spend it.
- A credit card user is a money abuser.
- A person in debt is caught in a net.
- When you use credit to buy, you don't think of the high interest charged on credit
- Save the plastic for something drastic.
- Throw away credit card offers that come in the mail. They offer lower introductory rates, but these are short-lived. Soon the regular double-digit interest rate will be charged.
Step 4: Activities
Have students role-play the NotSmart and Money Smart vignettes from the video, then discuss how they feel.
Have students research credit card debt in the United States. Have them compare consumer credit debt of today with that of 30 years ago. Share and discuss the research as a class.
Have students interview a family member or friend about their credit cards habits. Share these. Perhaps have each student question his/her parents about the number of credit cards they carry. This may be an eye-opener for them!!!! Be sure to tell on yourself as well.
Have students update the Do's and Don't section of their MoneySmart notebooks.
Have students create advertising slogans for avoiding use of credit cards. Post these in the class.
If you have easy access to phones or the Internet, have students research credit card companies, their policies, and interest rates. Share these with the class. As part of this, have students determine how long it would take to pay off a $500 item paying only the minimum amount each month. Also, have them calculate the final cost of the item.
Have students:
- Identify pros and cons of using credit cards.
- Remind them the emotional lift from a credit card purchase may be short-lived once that bill arrives.
- As part of this project, try to get students to brainstorm how a smart credit card user would behave.
- Be sure to include such tips as paying the total every month and using credit cards only in case of emergency.
- Make these into wall charts, or have students break into groups and create a CreditSmart mini-book.
Have students (individually, in pairs, or groups) create a poster(s) using one of the slogans covered in the first vignette or using one of the slogans they had written previously.