Credit card debt and other consumer debt is the worst type of debt. Interest rates and fees on borrowing money this way will be the highest of all, mostly because there is rarely a tangible item as collateral.
Financing a car for longer than the life of the vehicle can also be an unwise credit decision.
CREDIT CARDS
Credit cards are a great concept, but they end up bringing financial ruin to many people who do not use them properly.
Never use credit cards as extra money. Always allocate money from your current funds or monthly income in order to immediately payoff whatever you finance.
Read the fine print on the agreement to make sure you are getting the best terms available.
American consumers ages 20-29 carry an average of $5,781 in revolving debt.
This would take 11 years and 4 months to pay off assuming an average interest rate of 13% and that minimum payments are made.
Please review these few websites before proceeding…
Review…
Please review these few websites before proceeding…
Open and browse them for subject matter in order to use them as resources for completing some credit questions.
Web Pages:
http://www.federalreserve.gov/creditreports/
Read this story and draw from the examples given: http://www.themintgrad.org/learn/lifestyle-planning/real-flc-life-with-zero-debt/
Short synopsis of why debt is costly: http://www.americasaves.org/for-savers/set-a-goal-what-to-save-for/debt-and-credit/get-out-of-debt/what-is-debt-and-why-is-too-much-debt-costly
Apply…
What is credit and what are the advantages/disadvantages of credit?
What are credit scores and how are they determined?
How can you use credit and credit cards wisely?
What is the average amount of revolving debt of someone in their 20’s and why do you think this is the case? Explain.
What are the key factors of a good credit management program?
***Please answer these questions in 3-4 complete sentences citing the PowerPoint slide or website where the information pertaining to the question was found***
Last but not Least…
Take the lifeValues Quiz in the link provided: http://www.smartaboutmoney.org/Tools-Resources/LifeValues-Quiz.aspx
Your results will educate you on your thought process when you spend your own money. Please provide some feedback and explain if you though the quiz was correct in describing your thought process during spending. (3 sentences minimum)
