Types of Credit Unit

Students will be able to:

• Identify the major types of credit and their characteristics 
• Understand the three basic components of lines of credit: principal, interest rate, and term
• Define net worth and how it is calculated

Students will be able to

• Enumerate the differences between debit, prepaid debit, and credit cards
• Identify factors to consider when applying for a credit card 
• Explain how interest is charged and how to avoid or minimize it
• Understand how carrying a balance on a credit card and making only the minimum payment over time can lead to a cycle of debt

Students will be able to:

• Interpret data to understand what types of debt the average American household has
• Differentiate between amortized installment loans and revolving credit lines
• Read an amortization table and understand how the payments are structured
• Describe how Buy Now, Pay Later plans work

Students will be able to: 

• Calculate how much an auto loan will cost given special offers as well as standard factors such as down payment, APR, and term
• Compare auto loan offers and decide how they fit within your budget

Students will be able to:

• Correctly use fundamental vocabulary related to credit and lending
• Explain how loan amortization and payments work
• Understand how principal, interest rate, and term are critical components to evaluating credit options

In this lesson, students will be able to:

• Explain how a credit card works in terms of making purchases and managing payments
• Read a Schumer box and identify how terms of the card impact total cost of purchases
• Understand how interest is charged and how to avoid or minimize it
• Read a credit card statement

In this lesson, students will be able to:

• Establish criteria for choosing a credit card, based on the factors important to their needs
• Recognize and avoid marketing schemes that might lead to bad decisions
• Identify alternative routes to establishing credit, aside from opening their own credit card account  

In this lesson, students will be able to:

• Explain the fundamental features of a personal loan, including where to find one and how to apply
• Explore the peer-to-peer lending market as an alternative to traditional banks
• Understand the potential pitfalls of borrowing from family and friends, a personal 401(k), or a payday lender

In this lesson, students will be able to:

• Utilize knowledge and strategies to get the best possible financing terms (that meet their individual needs and budget) for a new or used car
• Explain the difference between a car loan and lease as well as advantages and disadvantages of each
• Have a backup plan if they find themselves unable to afford their car payments

In this lesson, students will be able to:

• Make informed decisions about how much student loan debt to take on, based on college costs and projected salary upon graduation
• Explain the difference between private and Federal loans, and the various types of Federal loans, and when to use each
• Select the best repayment option to minimize total amount paid while also keeping monthly payments reasonable within a budget
• Learn strategies for avoiding default, including whether consolidation is an appropriate option

In this lesson, students will be able to:

• Understand how down payment, interest rate, term, loan type, and amortization table work together to impact overall mortgage payments
• Recognize the pros and cons of fixed- and adjustable-rate mortgages
• Determine whether a home equity loan or line of credit is a viable loan option
• Decide whether renting or buying makes the most sense