Publication
What is Credit?
Objective
Students will be able to:
- Identify and explain the meaning of key terms such as credit, interest, and risk.
- Explain the advantages and disadvantages of using credit.
- Identify types of financial institutions that offer credit.
- Explain that most credit transactions are voluntary ones in which both sides expect to gain.
Standard
Standard: 4
- Students will understand that: People can choose to invest some of their money in financial assets to achieve long-term financial goals, such as buying a house, funding future education, or securing retirement income. Investors receive a return on their investment in the form of income and/or growth in value of their investment over time. People can more easily achieve their financial goals by investing steadily over many years, reinvesting dividends, and capital gains to compound their returns. Investors have many choices of investments that differ in expected rates of return and risk. Riskier investments tend to earn higher long-run rates of return than lower-risk investments. Investors select investments that are consistent with their risk tolerance, and they diversify across a number of different investment choices to reduce investment risk.
Concepts
In this personal finance lesson, students will learn the advantages and disadvantages of using credit.
Book Info
This lesson is part of Financial Fitness for Life 9-12, 3rd Edition and provides the slides and activities with educational technology tools. For full access to the book, shop the teacher guide and student workbook below.
Teacher Guide |
Student Workbook |
Available in eBook and hard copy |
Available in eBook and hard copy |
Description
Decisions about credit loom large in the lives of adults as they consider buying big-ticket items such as a home or a new car. Adults often use credit by using credit cards to buy goods and services or taking out loans to pay for college expenses. The decisions they make in these cases can have important consequences. This lesson introduces the concept of credit, with special attention paid to the advantages and disadvantages of using credit. It also describes particular types of loans including home mortgage loans, car loans, college loans, personal loans, and credit card loans.