Take Charge of Credit Cards Lesson Plan 1 6 1

1.6.
Take Charge of Credit Cards

Grade Level 7-9
Introductory Level
Time to complete: 135 minutes
National Content Standards
Family and Consumer Sciences Standards: 2.1, 2.6
National Council on Economic Education Teaching Standards: 2
National Standards for Business Education
Personal Finance: VII.1, VII.2
Objectives
Upon completion of this lesson, participants will be able to:
Identify the purpose of a credit card
Define common credit card terminology
Explain how to avoid paying interest on a credit card
Assess the advantages and disadvantages of credit cards
Distiniguish between positive and negative credit card behaviors
Analyze credit card safety tips
Introduction
WHAT IS CREDIT?
Credit is when goods, services, or money is received in exchange for a promise to pay a definite sum of money at a
future date. The word credit is derived from the Latin word, credo meaning I believe. The person who is
lending the money is saying, he believes the borrower is willing and able to keep his promise to pay the money
borrowed back, plus interest. Interest is the price of money. When referring to credit, interest is the charge for
borrowing money.
WHAT IS A CREDIT CARD?
A credit card is a plastic card that holds pre-approved credit which can be used for the purchase of items now and
payment of them later. In the case of credit cards, individuals can borrow as much money as needed as long as they
do not go over the credit limit, which is the maximum amount of money that can be charged on the credit card.
Every credit card has a different credit limit amount, which may be large or small. The amount of money charged on
a credit card may be paid back in one single payment or a series of equal or unequal monthly payments. However,
interest is charged to a credit card each month the amount of money owed is not paid in full. The longer the
cardholder takes to pay off the amount of money charged, the larger the total interest charges will be. The interest
rate charged on a credit card account each month is expressed as the annual percentage rate (APR).
Credit card companies require cardholders to make a minimum payment, which is the minimum amount of a credit
card bill that must be paid monthly. However, the minimum payment is usually only a small portion of the total
amount that the cardholder owes on the credit card. Therefore, a cardholder who only makes the minimum
payment every month will pay lots of interest and make slow progress toward paying off what is owed on the credit
card. The table below illustrates the difference between paying off a credit balance in full every month and only
making the minimum payment every month.
Take Charge Today November 2010 Take Charge of Credit Cards Page 1
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
1.6.1
Amount
charged to
credit card
APR
Amount paid
for first bill
$500.00
15%
$500
$500.00
15%
Amount paid Time to pay

Total amount Total amount
for every
off the credit
paid in interest
paid
additional bill
card
$0
Minimum
Minimum
payment of $20 payment of $20
1 month
$0
$500
3 years
$104
$604
In order to receive a credit card, a person should first examine various credit card offers. A credit card offer displays
the costs of a credit card, including interest rates and fees charged. Once the best card is chosen, an individual would
complete an application to apply for that card.
To receive a credit card, consumers must be 21 years of age or older. Consumers under 21 can still get a credit card,
but they need to either have a co-signer or show documentation of sufficient income to make payments. If someone
agrees to be a co-signer on an account, they are equally responsible for the loan.
CREDIT CARDS VERSUS DEBIT CARDS
It is important to understand the difference between a credit card and a debit card. A debit card is a plastic card
which looks like a credit card, but is electronically connected to a depository institution account that holds the
cardholders money. When a debit card is used to make a purchase, the money is immediately taken out of the
account. In contrast, a credit card transaction is not linked to the cardholders depository institution account. Money
is borrowed and paid back later.
ADVANTAGES AND DISADVANTAGES OF USING A CREDIT CARD
If a credit card is used properly it offers many benefits to the cardholder. However, if used irresponsibly, credit cards
may have many disadvantages as well.
Advantages
Convenient
Useful for emergencies
Often required to hold a reservation

Purchase expensive items earlier
Possibility of receiving bonuses, such as
frequent flyer miles and cash rebates
Disadvantages
Paying interest if balance is kept on card
Additional fees may apply if card is not used
properly
Tempting to overspend
Responsible for lost/stolen cards
Risk of identity theft
RESPONSIBLE CREDIT CARD USE

In order to take advantage of the benefits of a credit card, a cardholder should use a credit card responsibly. When a
credit card is used irresponsibly, penalty fees and penalty interest are often charged to the cardholder. A late
payment fee is charged when a cardholder does not make the minimum payment by the due date. An over-thelimit fee is charged if the amount of money charged goes over the cards credit limit. In addition to paying these fees,
cardholders often have to pay penalty interest if late payments are made or credit limits are exceeded. Penalty APR
is a higher interest rate that is charged on new transactions. In addition to being charged extra penalty fees and
interest, if a credit card is used irresponsibly the cardholder could pay large amounts of interest and accumulate large
amounts of debt that can be very difficult to pay back.
1.6.1
The following table outlines responsibe and irresponsible actions when using a credit card.
Do
Pay the amount charged to a credit card in full every
month
Pay credit card payments on time
Keep track of all charges by keeping receipts
Check the monthly credit card statement for errors
Dont
Make late credit card payments
Pay only the minimum payment due

Go over the cards credit limit
Charge items that cant be paid off within the month
CREDIT CARD STATEMENT

Credit card statements summarize important information about a credit card account. They are sent to the
cardholder every month and include information regarding credit card use from the previous month. The
information on a credit card statement includes transactions the cardholder has made during the previous month,
the current amount owed on the credit card, the amount of the minimum payment due, and the payment due date,
which is the date the minimum payment must be paid. To use credit cards in a responsible manner, cardholders
should examine their credit card statements to check for incorrect or false charges and make sure payments are made
on time.
CREDIT CARD SAFETY TIPS
If a credit card or credit card information is acquired fraudulently by someone else they can make charges with that
card. Therefore, it is important to keep credit cards and credit card information secure by following these safety tips:
A lost or stolen credit card should always be reported immediately. Promptly reporting a lost or stolen credit
card will reduce the cardholders liability for any possible fraudulent purchases.
When using a credit card, sign the back with a signature and Please See I.D. The Please see I.D. will alert the
merchant to check the identification of the individual using the card and compare it to the name and signature
on the credit card.
Do not leave cards lying around the home or office.
When closing a credit card account, notify the credit card company in writing and by phone, then cut up the
card.
Never give out a credit card number unless making purchases that you initiated.
Keep a list of all cards, account numbers, and phone numbers separate from cards, in case the card is lost.
Shred any credit card offers received in the mail.
Check credit card statements monthly to ensure there are no false charges.
In this lesson, participants will explore the basics of credit cards. Participants will learn that credit cards can have
many advantages if they are used responsibly. Participants will also learn how to avoid paying interest on a credit
card and how to keep credit cards and credit card information safe.
Body
1. Prior to beginning the lesson, assign the Take Charge of Credit Cards Information Sheet 1.6.1.F1 as homework,
and instruct participants to discuss the information with an adult.
Anticipatory Set:
2. Conduct the Credit Card Statistics Puzzles activity.
a. Prepare the puzzle pieces.
i. Print each Credit Card Statistic Puzzles 1.6.1.H1 on different colored paper.
1.6.1
ii. Depending on the number of participants and the number of desired groups, cut each statistic
into the number of participants desired in each group. Groups of 3-6 participants are
recommended for this lesson.
1. Seven statistics are provided to create up to seven groups but it is not necessary to use
all statistics.
2. For example, if you want 5 groups of 4, cut 5 statistics into four different pieces.
b. Play activity
i. Give each participant a piece of a puzzle.
ii. Direct participants to find others that have the same color paper.
iii. Once they find everyone with the same color paper, the group must put their puzzle together to
reveal the financial statistic.
iv. Have each group share their financial statistic.
1. *Note to educator: The statistics provided may be used to reinforce certain concepts
throughout the facilitation of the Take Charge of Credit Cards PowerPoint
Presentation 1.6.1.G1. These points are noted throughout the lesson instruction
section and also in the list of statistics.
2. *Note to educator: The statistics may also be discussed at the end of the lesson
facilitation.
v. Instruct participants to remain in their groups for the remainder of the lesson.
c. The following statistics are provided in the Credit Card Statistic Puzzles 1.6.1.H1. The educator can
add and remove statistics as needed.
i. Statistic 1: U.S. consumers owe a total of $2.42 trillion.
1. Statistic can be referenced on Slide 2.
2. Source: Federal Reserve's G.19 report on consumer credit, August 2010
ii. Statistic 2: U.S. consumerss hold a total of 609.8 million credit cards.
2. Source: The Survey of Consumer Payment Choice," Federal Reserve Bank of Boston,
January 2010
iii. Statistic 3: The average APR on a new credit card offer is 14.35%.
2. Source: CreditCards.com Weekly Rate Report, Aug. 25, 2010
iv. Statistic 4: U.S. households that had credit card debt owed an average of $15, 788.
2. Source: Federal Reserve's G.19 report on consumer credit, August 2010
v. Statistic 5: About 60% of U.S. consumers have a credit card that offers rewards to the
cardholder.
2. Source: "The Survey of Consumer Payment Choice," Federal Reserve Bank of Boston,
January 2010
vi. Statistic 6: 92% of credit cards charge a fee for exceeding the credit limit with the average fee
being $39.
2. Source: Pew Safe Credit Cards Project, March 2009
vii. Statistic 7: Credit card holders pay about $20.5 billion in credit card penalty fees every year.
1. Statistic can be reference on Slide 13.
2. Source: New York Times, September 2009
1.6.1
Lesson Instruction:
3. Pass out Take Charge of Credit Cards Note Taking Guide 1.6.1.L1 to each participant to be completed during
the PowerPoint presentation.
4. Present the Take Charge of Credit Cards PowerPoint Presentation 1.6.1.G1.
a. Slide 1: Take Charge of Credit Cards
i. Explain to participants that today they will learn all about credit cards and how to use them in a
positive manner to avoid becoming one of the statistics.
b. Slide 2: What is Credit?
i. In groups, ask participants to discuss what they believe credit is.
ii. Discuss the definition of credit as a class. Emphasize the agreement or promise that is made.
Credit is not free money; you are obligated to pay back the money.
iii. Explain to participants that when using credit not only do you have to pay back the money, but
you also have to pay interest.
iv. *Note to educator: Statistic 1 can be referenced and discussed here to emphasize money
borrowed must be paid back: U.S. consumers owe a total of $2.42 trillion.
c. Slide 3: What is Interest?
i. Ask participants to discuss within their groups what they believe interest is.
ii. Discuss the definition of interest as a class.
d. Slide 4: What is a Credit Card?
i. In groups, ask participants to discuss what a credit card is. How is a credit card different from
other types of credit?
ii. Discuss the definition and characteristics of a credit card as a class.
i. *Note to educator: Statistic 2 can be referenced and discussed here to emphasize the
importance of learning about credit cards: U.S. consumerss hold a total of 609.8 million credit
cards.
e. Slide 5: Credit Card Payments
i. Explain to participants that with a credit card, people have different payment options.
ii. Explain to particpants that even though they can make unequal montly payments on a credit
card, they are always required to pay a specific minimum amount, known as the minimum
payment.
iii. Ask participants to determine which payment option they believe would be the best.
iv. Discuss how the minimum payment amount is usually a very small portion of the total amount
due on the credit card.
f. Slide 6: Credit Card Interest
i.
Explain to participants that credit card interest is known as APR.
*Note to educator: Statistic 3 can be referenced and discussed here to emphasize that credit
ii.
cards often charge high interest rates: The average APR on a new credit card offer is 14.35%.
iii.
Optional activity: Show a clip from the movie Confessions of a Shopoholic.
1. *Note to educator: The Confessions of a Shopoholic Active Learning Tool 3.0.41 is
available if the entire movie is shown. The active learning tool includes worksheets and
further discussion prompts and explanation.
2. Play from the start of chapter 2 (approximately minute 4:30) until minute 7:45.
This scene will open up discussion regarding topics throughout the remainder
of the lesson.
In this scene, Rebecca is on her way to a big interview, and she wants to
purchase a very expensive scarf even though she just received a $900 credit card
bill in the mail. She has to pay for the scarf with a combination of cash and
multiple credit cards. One of her credit cards is declined and she ends up
borrowing money from a stranger to purchase the scarf.
1.6.1
3. Discuss the movie clip by asking participants the following discussion questions:
If Rebecca doesnt have the money to pay for the scarf now, do you think she
will be able to pay the charge to her credit card later?
i. Since Rebecca is struggling to pay for the scarf now, chances are she
wont be able to pay for it later especially if she continues to charge
items to her credit card.
Why was Rebeccas credit card declined? Do you think this is positive or
negative?
i. She reached her credit limit.
Does Rebecca need the items she is purchasing with her credit card?
i. No, Rebecca wants the items she is purchasing with her credit card.
Do you think Rebecca is using credit cards positively or negatively?
How is Rebecca using credit cards negatively?
g. Slide 7: What if only the minimum payment is made every month?
i. Ask participants to discuss within their groups what they believe would happen if only the
minimum payment on a credit card was made every month.
ii. Show participants the table illustrating what happens to the same purchase when only the
minimum payment is made versus paying the entire balance on the credit card. Skylar is still
paying for his plane ticket three years later!
iii. Explain to participants that when only the minimum payment on a credit card is made, the
cardholder pays high amounts of interest and makes slow progress towards paying off the credit
card.
iv. Make sure to emphasize that if a credit card is paid in full every month, the cardholder will pay
no interest.
v. *Note to educator: Statistic 4 can be referenced and discussed here to emphasize that if a
minimum payment is made every month a person can accumulate a large credit card balance:
U.S. households that had credit card debt owed an average of $15,788.
vi. *Note to educator: If the Confessions of a Shopaholic movie clip was shown it can be
discussed here.
1. Do you believe Rebecca is only making the minimum payments on her credit cards?
Because Rebecca has reached the credit limit on at least one of her credit cards
and owes $900 on another, chances are she is only making the minimum
payment if not less. Later in the movie, Rebecca is being plagued by debt
collectors, so she wasnt even making her minimum payments.
h. Slide 8: What is the difference between credit cards and debit cards?
i. Ask participants to discuss within their groups what they believe is the difference between a
credit card and a debit card.
ii. Discuss the differences as a class emphasizing that debit card purchases are paid immediately
while credit card puchases are paid back later.
i. Slide 9: How do you get a credit card?
i. Explan to participants that it is important to examine different credit card offers and choose the
credit card that is best for you.
ii. Explain that once a credit card application is completed, the applicant isnt guaranteed to be
approved for and receive the credit card.
j. Slide 10: Getting a Credit Card- Restrictions
i. Explain to participants that consumers under the age of 21 can only receive a credit card if they
can prove that they have sufficient income to pay the borrowed money back or if they have a
cosigner.
1.6.1
1. Stress the implications of being a cosigner. A cosigner is equally responsible for paying
back the money borrowed.
k. Slide 11: What are the advantages and disadvantages to using a credit card?
i. Write Advantages and Disadvantages on the board.
ii. Have participants work in their groups to identify three advantages and three disadvantages of
using a credit card and record these on their Take Charge of Credit Cards Note Taking Guide
1.6.1.L1.
1. *Note to educator: If participants are not using the Take Charge of Credit Cards Note
Taking Guide 1.6.1.L1, then give each group a large piece of butcher paper to complete
the brainstorming activity. The butcher paper can be split into four sections to complete
brainstorming on slide 11 and 12.
iii. One participant from each group can come to the board and write their ideas under each
heading.
iii. Discuss the advantages of having a credit card and add to the participants ideas with the
advantages listed on Slide 11.
iv. Discuss the disadvantages of having a credit card and add to the participants ideas with the
disadvantages listed on Slide 11.
v. *Note to educator: Statistic 5 can be referenced and discussed here to emphasize that there are
advantages and disadvantages to using a credit card: About 60% of U.S. consumers have a credit
card that offers rewards to the cardholder.
discussed here.
1. Is Rebecca is taking advantage of any of the advantages of using a credit card?
Yes, Rebecca is taking advantage of credit card bonuses by receiving 1% cash
back.
2. Is Rebecca experiencing any of the disadvantages of using a credit card?
Yes, she is overspending and using her credit card for emergencies that really
arent emergencies.
l. Slide 12: Responsible Credit Card Use
i.
Have participants work in their groups to identify three things that a person should do in
regards to a credit card and three things a person should not do in regards to a credit card and
record these on their note taking guide.
a. *Note to educator: If participants are not using the Take Charge of Credit Cards
Note Taking Guide 1.6.1.L1, then give each group a large piece of butcher paper to
complete the brainstorming activity. The butcher paper can be split into four sections
to complete brainstorming on slide 11 and 12.
ii.
Discuss the positive uses of a credit card and add to the participants ideas with the advantages
listed on Slide 12.
iii.
Discuss the negative uses of a credit card and add to the participants ideas with the
disadvantages listed on Slide 12.
*Note to educator: The following statistic can be referenced and discussed here: Credit card
iv.
holders pay about $20.5 billion in credit card penalty fees every year.
1. Use this statistic to explain what can happen if a credit card is used irresponsibly.
ii. *Note to educator: If the Confessions of a Shopaholic movie clip was shown it can be
discussed here.
1. Is Rebecca using a credit positively?
No, she is not paying her balances in full, she isnt tracking her charges or
keeping her receipts
2. How is Rebecca negativiely using a credit card?
1.6.1
m.
n.
o.
p.
q.
She is reaching the credit limits, charging items that she cant pay off within the
month, and she isnt tracking her expenses.
Slide 13: What happens when a credit card is used irresponsibly?
i. Explain to participants when a credit card is used negatively, the cardholder is often charged
penalty fees and higher penalty interest rates.
ii. Explain to participants that Penalty APR is usually charged in addition to the late payment and
over-the-limit fees.
iii. Explain to particpants that in addition to being charged fees and higher interest, a cardholder
could pay large amounts of interest and accumulate large amounts of debt.
iv. *Note to educator: Statistic 6 can be referenced and discussed here: 92% of credit cards charge a
fee for exceeding the credit limit with the average fee being $39.
v. *Note to educator: Statistic 7 can be referenced and discussed here: Credit card holders pay
about $20.5 billion in credit card penalty fees every year.
discussed here.
1. Based on what you know about Rebeccas credit card use, what do you believe will
happen to her?
Rebecca will most likely have to pay a large amount of interest and fees,
including an over-the-limit fee. She will have a hard time paying back her credit
card bills.
Slide 14: What is a Credit Card Statement?
i. Discuss what a credit card statement is and what is included on a credit card statement.
ii. Ask particpants to determine why is is important to examine a credit card statement.
1. To check for errors and fraudulent charges
2. To determine when the payment due date is to ensure the payment is made on time.
Slide 15-16: Credit Card Safety Tips
i. Explain to participants why it is important to keep credit cards and credit card information safe.
ii. Discuss the credit card safety tips.
iii. Illustrate Credit Card Safety Tips: Instruct participants to illustrate a credit card safety tip.
1. Pass out an extra piece of paper and if desired, crayons, markers, and/or colored pencels
to each participant.
2. Instruct participants to illustrate on the paper one of the credit card safety tips they just
learned.
3. If time allows, have participants share their illustrations.
4. *Note to educator: The completed illustrations can be turned into a Credit Card
Safety Tips bulletin board to be displayed for others to view.
iv. *Note to educator: If the Confessions of a Shopaholic movie clip was shown it can be
discussed here.
1. Rebecca seems happy that someone potentially has stolen her credit card. Is this a good
reaction to have?
Slide 17: Summary
i. Assess participant learning by asking summary questions and discussing.
Slide 18: Remember
i. Review some of the main points of the lesson.
1.6.1
Conclusion
Complete the What Would You Do? 1.6.1.H2 activity.
a. Pass out one What Would You Do? 1.6.1.H2 to each group of participants.
b. Participants will read the scenarios and decide as a group what they would do in that situation.
c. Each group will take turns reading their scenario cards aloud and sharing what they would do in that
situation.
OR
Complete the Credit Card Bumper Sticker activity. Participants will create a bumper sticker that explains how to use
a credit card responsibly.
*Note to educator: The Credit Card Bumper Sticker 1.6.1.E1 are provided as an example bumper sticker that can be
shown to participants. The Credit Card Bumper Sticker Rubric 1.6.1.B1 is available as a grading tool.
*Note to educator: To integrate technology into the activity, have participants create their bumper sticker slogans
using Voki (http://www.voki.com/). Refer to the Technology Integration Options 3.0.50 for assistance with Voki.
1. Prepare supplies
a. *Note to educator: There are two variations of this activity, one makes usable bumper stickers, and one
makes mock bumper stickers.
b. Actual Bumper Stickers:
i. 8 x 11 in. full sheet white labels, one for every two participants
1. Avery# 8165 for 25 ink-jet labels (or similar)
2. Cut sheets in half lengthwise, one half for each participant, or allow participants to cut
into shapes they want
ii. 8 x 11 in. full sheet clear labels, one for every two participants (to be used as a lament over the
white label)
1. Avery # 8665 for 25 ink-jet labels (or similar)
2. Cut sheets in half lengthwise, one half for each participant, or allow participants to cut
into shapes they want, being sure that clear label shapes match the white label shapes
c. Mock Bumper Stickers
i. Paper, any kind, white, colored, any size
1. Cut into specific size or allow participants to cut into specific sizes/shapes themselves
d. Provide participants with markers, crayons, and/or colored pencils. Stickers, colored paper, or other
decorative things can be added to either of the bumper sticker activities
2. Create the bumper sticker.
a. Instruct participants to create a bumper sticker that explains how to use a credit card responsibly.
b. Encourage participants to be creative but to express themselves as concisely as possible. Remind
participants bumpers stickers are short and to the point. They may want to brainstorm before starting
the bumper sticker so they do not make mistakes on their final product (especially when using the actual
stickers because supplies can be expensive).
c. Remind participants that bumper stickers are designed to be read at a distance, in this case, from at least
6 feet away and should be eye-catching and appealing.
d. Participants can use well-known sticker slogans as ideas, Honk if you ________, or advertising
slogans such as Got __________? Participants can also use their own creative ideas.
e. *Note to educator: The completed bumper stickers can be displayed for everyone to see on a bulletin
board or some other type of display.
1.6.1
Assessment
Complete the Taking Credit Cards by the Horns 1.6.1.A1 worksheet.
OR
Complete the Confessions of a Shopaholic Active Learning Tool 3.0.41.
*Note to educator: The materials to complete this activity are not included in this lesson plan. The materials
to complete the Confessions of a Shopaholic Active Learning Tool 3.0.41 can be downloaded from the
FEFE website.
Materials
Taking Credit Cards by the Horns 1.6.1.A1
Credit Card Bumper Sticker Rubric 1.6.1.B1
Credit Card Bumper Sticker Examples 1.6.1.E1
Take Charge of Credit Cards Information Sheet 1.6.1.F1
Take Charge of Credit Cards PowerPoint Presentation 1.6.1.G1
Credit Card Statistics Puzzles 1.6.1.H1
What Would You Do? 1.6.1.H2
Take Charge of Credit Cards Note Taking Guide 1.6.1.L1
Materials not included in lesson:

7 different colors of paper
Plain white paper- 1 piece per participant
Crayons, markers, and/or colored pencils
8 x 11 in. full sheet white labels, one for every two participants
8 x 11 in. full sheet clear labels, one for every two participants
Confessions of a Shopaholic movie
Resources
Understanding a Credit Card Lesson Plan 2.6.3
1.6.1.H1
Activity Cards
Credit Card Statistics Puzzles
Statistic 1
U.S. consumers owe a
total of $2.42 trillion.
1.6.1.H1
Activity Cards
Statistic 2
U.S. consumers hold a
total of 609.8 million
credit cards.
1.6.1.H1
Activity Cards
Statistic 3
The average APR on a
new credit card offer
is 14.35%.
1.6.1.H1
Activity Cards
Statistic 4
U.S. households that
had credit card debt
owed an average of
$15,788.
1.6.1.H1
Activity Cards
Statistic 5
About 60% of U.S.
consumers have a
credit card that offers
rewards to the
cardholder.
1.6.1.H1
Activity Cards
Statistic 6
92% of credit cards
charge a fee for
exceeding the credit
limit with the average
fee being $39.
1.6.1.H1
Activity Cards
Statistic 7
Credit card holders
pay about $20.5 billion
in credit card penalty
fees every year.
1.6.1.L1
Note taking guide
Take Charge of Credit Cards

Note Taking Guide
Total Points Earned
Total Points Possible
Percentage
What is credit?
A credit card is
a form of
credit!
What is interest?
What is a credit card?
What is a credit limit?
What is a minimum payment?
What is APR?
How can interest charges be avoided on a credit card?
1.6.1.L1
Note taking guide
What is a debit card?
What two steps are invlolved with getting a credit card?

1.
2.
Are there any restrictions to receiving a credit card?
What are the Advantages and Disadvantages to

Using a Credit Card?
Advantages
Disadvantages
1.6.1.L1
Note taking guide
Responsible Credit Card Use
Do
Dont
What is a late payment fee?
What is an over-the limit fee?
What is Penalty APR?
What are two items that are included in a credit card statement?
1.
2.
What are two credit card safety tips?

1.
2.
1.6.1.H2
Activity Cards
What Would You Do?

What would you do?
1.6.1.H2
When Sam returned home from the grocery store, he realized that
he did not have his wallet. His wallet contains his credit card, debit
card, drivers license, and some cash. What would you do in this
situation?
1
What would you do?
1.6.1.H2
Carrie used her new credit card to make several purchases but has
not signed the back. Carrie decides it is not necessary, because none
of the store clerks have mentioned it to her her. What would you
do if it were your credit card?
2
What would you do?
1.6.1.H2
Etta received her credit card statement in the mail. She owes $100
on the credit card but has decided to only pay the minimum
payment of $15 this month. What would you do in this situation?
3
What would you do?
1.6.1.H2
Ryan had just returned home from school when the phone rang.
The person on the other end said she was from his bank and
needed to know his credit card number to verify his account. What
would you do in this situation?
4
What would you do?
1.6.1.H2
Antonio recently charged groceries to his credit card. The store

clerk asked Antonio if he would like her to print a copy of the
credit card receipt for him. Antonio prefers to save paper, so he did
not have her print a receipt. What would you do in this situation? 5
1.6.1.H2
2.4.1.H2
Activity Cards
What would you do?
1.6.1.H2
Chelsea closed one of her credit card accounts, and she doesnt
know what to do with the credit card. What would you do with the
credit card?
6
What would you do?
1.6.1.H2
Ruben found his credit card statement in a stack of papers on his

desk. The credit card payment for the month was due last week.
Ruben decided that since he is already late paying his bill for the
month that he would wait until next month to make the payment.
What would you do in this situation?
What would you do?
7
1.6.1.H2
Angie just turned 21 and has received numerous credit card offers
in the mail. She doesnt need a credit card, so she tossed the
unopened envelopes in her waste basket. What would you do with
the credit card offers?
8
What would you do?
1.6.1.H2
Trents friend Sheila has asked him to be a co-signer on a credit

card she is applying for. Sheila explains to Trent that all he has to
do is sign a piece of paper. What would you do in this situration?
9
What would you do?
1.6.1.H2
Kevin received his credit card statement this week and glanced over
it. He noticed there were several items charged on his card that he
did not purchase. What would you do in this situation?
10
1.6.1.B1
Rubric
Credit Card Bumper Stickers

Rubric
Name____________________
Date____________________
Class____________________
Objective
Content
Accuracy
Design
Creativity
Use of
Class
Time
Exemplary - 3
The bumper
sticker completes
the objective of
explaining how
to use credit
cards
responsibly.
90-100% of the
information on
the bumper
sticker is
accurate.
The bumper
sticker design is
appealing to the
eye and easy to
read.
Satisfactory - 2
The bumper
sticker mostly
completes the
objective of
explaining how to
use credit cards
responsibly.
80-89% of the
information on the
bumper sticker is
accurate.
Unsatisfactory - 1
The bumper sticker
does not complete
the objective of
explaining how to
use credit cards
responsibly.
Rating
Weight
3
Fewer than 80% of

the information on
the bumper sticker is
accurate.
An effort was
made to make the
bumper sticker
design appealing to
the eye and easy to
read.
The overall
An effort was
bumper sticker is made to make the
creative and
overall bumper
would catch
sticker creative and
someones
catch someones
attention.
attention.
Used time well
Used some of
during class.
class time well.
Focused on
There was some
getting the
focus on getting
project done.
the project done.
No effort was made

to make the bumper
sticker design
appealing to the eye
and easy to read.
No effort was made

to make the bumper
sticker creative and
catch someones
attention.
Did not use class

time well. Did not
focus on the project.
Total Points Earned

Total Points Available
Percentage
Score
36
1.6.1.E1
Resource
Credit Card Bumper Stickers

Examples
Do you promise to pay back this amount

of money at the end of the month?
I DO!
Avoid a BUMP in your financial road
Pay your credit card bill in
full every month!
Take Charge Today Novenber 2010 Take Charge of Credit Cards Page 24
1.6.1.A1
Worksheet
Taking Credit Cards by the Horns

Name____________________
Total Points Earned

Total Points Possible
Percentage
25
Date____________________
Class ____________________
Directions: Match the following terms with the correct definitions. (1 point each)
A.
B.
C.
D.
E.
Annual Percentage Rate

Credit
Credit Limit
Due Date
Interest
F.
G.
H.
I.
Late Payment Fee

Minimum Payment
Over-the-limit fee
Penalty APR
1. _______ Fee charged when a cardholder does not make the minimum monthly payment by the due
date.
2. _______ The price of money
3. _______ When goods, services, or money is received in exchange for a promise to pay a definite sum of
money at a future date
4. _______ The maximum dollar amount that can be charged on a credit card
5. _______ The interest rate charged on a credit card account each month
6. _______ Minimum amount of a credit card bill that must be paid every month.
7. _______ A higher interest rate that is charged on new transactions
8. _______ The date the minimum payment is due.
9. _______ Charged if the amount of money charged goes over the cards credit limit
Directions: Identify the following statements as positive or negative uses of a credit card. Place a P in the
blank if the action is a positive use of a credit card and place a N in the blank if the action is a negative use of a
credit card. (1 point each)
10. _______ Paying the amount charged to a credit card in full every month
11. _______ Paying credit card payments on time
1.6.1.A1
Worksheet
12. _______ Paying only the minimum payment due

13. _______ Keeping track of all charges by keeping receipts
14. _______ Going over the cards credit limit
15. _______ Checking the monthly credit card statement for errors
16. _______ Charging items that cant be paid off within the month
Directions: Answer the following questions.
17. How can a person avoid paying interest on a credit card? (1 point)
18. What is the difference between a credit card and a debit card? (2 points)
19. What does it mean to be a co-signer on a credit account? (1 point)
20. What are two advantages and two disadvantages to using a credit card? (2 points)
21. Why is it important to examine a credit card statement? (1 point)
22. What are two safety tips that should be followed when using a credit card? (2 points)
2.4.1.H2
1.6.1.F1
Take Charge of
Credit Cards
Introductory Level
What is Credit?
Credit is when goods, services, or money is received in exchange for a promise to pay a denite sum of money at a
future date. The word credit is derived from the Latin word, credo meaning I believe. The person who is
lending the money is saying, in eect, he believes the borrower is willing and able to keep his promise to pay the
money back, plus interest. Interest is the price of money. When referring to credit, interest is the charge for
borrowing money.
Have you ever borrowed money from
someone? Did you have to pay back interest?
Requests credit
from lender
Gives borrower
credit if they believe
the borrower will pay
money back
Pays back the

money PLUS
interest
What is a Credit Card?

A credit card is a plastic card that holds pre-approved credit which can be used
for the purchase of items now and payment of them later. In the case of credit
cards, individuals can borrow as much money as needed as long as they do not
go over the credit limit, which is the maximum amount of money that can be
charged on the credit card. Every credit card has a dierent credit limit amount,
which may be large or small. The amount of money charged on a credit card
may be paid back in one single payment or a series of equal or unequal monthly
payments. However, interest is charged to a credit card each month the amount
of money owed is not paid in full. The longer the cardholder takes to pay o
the amount of money charged, the larger the total interest charges will be. The
interest rate charged on a credit card account each month is expressed as the
annual percentage rate (APR).
Why would it be easy for a

person to use a credit card to
spend more money than they
actually have?
Credit card companies require cardholders to make a minimum payment, which is the minimum amount of a
credit card bill that must be paid monthly. However, the minimum payment is usually only a small portion of the
total amount that the cardholder owes on the credit card. Therefore, a cardholder who only makes the minimum
payment every month will pay lots of interest and make slow progress toward paying o what is owed on the credit
card. The table and scenario below illustrate the dierence between paying o a credit balance in full every month
and only making the minimum payment every month.
Melissa and Skylar each purchased a plane ticket for $500 using their credit cards that charge 15% APR.
Payment
Time to pay o credit card
Total amount of interest paid
Total amount paid
Melissa-
Skylar-
Paid the full amount owed- $500
Paid the minimum payment due- $20
1 month
3 years
$0
$104
$500
$604
1.6.1.F1
If you owned a credit card, how would you avoid paying interest on the amount of money charged?
In order to receive a credit card, a person should rst examine

various credit card oers. A credit card oer displays the costs
of a credit card, including interest rates and fees charged. Once
the best card is chosen, an individual would complete an
application to apply for that card.
To receive a credit card, consumers must be 21 years of age or
older. Consumers under 21 can still get a credit card, but they
need to either have a co-signer or show documentation of
sucient income to make payments. If someone agrees to be a
co-signer on an account, they are equally responsible for the
loan.
When choosing a credit card, would you look

for a credit card with a high or low APR ?
Would you consider being a co-signer on a

credit card?
Credit Card versus Debit Card

It is important to understand the dierence between a credit card and a debit card. A debit card is a plastic card
which looks like a credit card, but is electronically connected to a depository institution account that holds the
cardholders money. When a debit card is used to make a purchase, the money is immediately taken out of the
account. In contrast, a credit card transaction is not linked to the cardholders depository
institution account. Money is borrowed and paid back later.
Advantages and Disadvantages

of Using a Credit Card
If a credit card is used properly it oers many benets to the cardholder. However, if used irresponsibly, credit
cards may have many disadvantages as well.
Advantages
Convenient
Useful for emergencies
Often required to hold a reservation
Purchase expensive items earlier
Possibility of receiving bonuses, such as frequent
yer miles and cash rebates
How could a credit card be useful for emergencies?
Disadvantages
Paying interest if balance is kept on card
Additional fees may apply if card is not used
properly
Tempting to overspend
Responsible for lost/stolen cards
Risk of identity theft
If you owned a credit card, how would you

avoid overspending?
1.6.1.F1
Responsible Credit Card Use

In order to take advantage of the benets of a credit card, a cardholder should use a credit card responsibly. When a
credit card is used irresponsibly, penalty fees and penalty interest are often charged to the cardholder. A late
payment fee is charged when a cardholder does not make the minimum payment by the due date. An over-thelimit fee is charged if the amount of money charged goes over the cards credit limit. In addition to paying these
fees, cardholders often have to pay penalty interest if late payments are made or credit limits are exceeded. Penalty
APR is a higher interest rate that is charged on new transactions. In addition to being charged extra penalty fees
and interest, if a credit card is used irresponsibly the cardholder could pay large amounts of interest and accumulate
large amounts of debt that can be very dicult to pay back.
Do
Paying the amount charged to a credit card in full
every month
Paying credit card payments on time
Keeping track of all charges by keeping receipts
Checking the monthly credit card statement for
errors
Dont
Making late credit card payments
Paying only the minimum payment due

Going over the cards credit limit
Charging items that cant be paid o within the
month
Why do you think it is important to keep all credit card receipts?
Credit Card Statement

Credit card statements summarize important information about a credit card account. They are sent to the
cardholder every month and include information regarding credit card use from the previous month. The
information on a credit card statement includes transactions the cardholder has made during the previous month,
the current amount owed on the credit card, the amount of the minimum payment due, and the payment due date,
which is the date the minimum payment must be paid. To use credit cards in a responsible manner, cardholders
should examine their credit card statements to check for false charges and make sure payments are made on time.
Credit Card Safety Tips

If a credit card or credit card information is acquired fraudulently by someone else they can make charges with that
card. Therefore, it is important to keep credit cards and credit card information secure by following safety tips:
A lost or stolen credit card should always be reported immediately. Promptly reporting a lost or stolen credit
card will reduce the cardholders liability for any possible fraudulent purchases.
When using a credit card, sign the back with a signature and Please See I.D. The Please see I.D. will alert
the merchant to check the identication of the individual using the card and compare it to the name and
signature on the credit card.
When closing a credit card account, notify the credit card company in writing and by phone, then cut up the
card.
Never give out a credit card number unless making purchases that you initiated.
Keep a list of all cards, account numbers, and phone numbers separate from cards, in case the card is lost.
Shred any credit card oers received in the mail.
Check credit card statements monthly to ensure there are no false charges.
What could happen if a person threw a credit card oer away without shredding it?

Take Charge of Credit Cards Lesson Plan 1 6 1

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1.6.

Take Charge of Credit Cards

Amount paid Time to pay

Often required to hold a reservation

RESPONSIBLE CREDIT CARD USE

Pay only the minimum payment due

CREDIT CARD STATEMENT

Materials not included in lesson:

Understanding a Credit Card Lesson Plan 2.6.3

Credit Card Statistics Puzzles

Take Charge of Credit Cards

What is a credit card?

What is a credit limit?

What is a minimum payment?

How can interest charges be avoided on a credit card?

What is a debit card?

What two steps are invlolved with getting a credit card?

Are there any restrictions to receiving a credit card?

What are the Advantages and Disadvantages to

Responsible Credit Card Use

What is a late payment fee?

What is an over-the limit fee?

What is Penalty APR?

What are two credit card safety tips?

What Would You Do?

What would you do?

What would you do?

What would you do?

What would you do?

Antonio recently charged groceries to his credit card. The store

What would you do?

What would you do?

Ruben found his credit card statement in a stack of papers on his

What would you do?

What would you do?

Trents friend Sheila has asked him to be a co-signer on a credit

What would you do?

Credit Card Bumper Stickers

Fewer than 80% of

No effort was made

No effort was made

Did not use class

Total Points Earned

Credit Card Bumper Stickers

Do you promise to pay back this amount

Taking Credit Cards by the Horns

Total Points Earned

Annual Percentage Rate

Late Payment Fee

12. _______ Paying only the minimum payment due

19. What does it mean to be a co-signer on a credit account? (1 point)

21. Why is it important to examine a credit card statement? (1 point)

Pays back the

What is a Credit Card?

Why would it be easy for a

Paid the full amount owed- $500

Paid the minimum payment due- $20

In order to receive a credit card, a person should rst examine

When choosing a credit card, would you look

Would you consider being a co-signer on a

Credit Card versus Debit Card

Advantages and Disadvantages