What is Credit?

Learning Goals/Objectives:

Students will demonstrate an understanding of what credit is based on inquiry questioning.
Students will cite reasons based on their own assumptions as to the purpose of credit and share these reasons with their peers in a classroom discussion.
Students will demonstrate an understanding of basic credit terms in a written assessment later in the week.
Students will demonstrate that they understand that credit is a privelage not a responsibility.
Students will define the 5 C’s of Credit in an assessment later in the week.

Grouping of Students:

Individual
Groups of four

Methods:

Inquiry questioning
KWL

Activities:

“Hook” – Define Credit and show a video clip that
illustrates how the dangers of credit effected our economy in 2008. – 10
minutes

a. Critical Thinking (KWL) – 10 minutes

Fill out the KWL - citing reasons based on your own
assumptions as to the purpose of credit. Be clear in the explanation of the
importance of completing the graphic organizer that today is a great
opportunity to learn about something that could have a great affect on their
lives.

b. Direct Instruction – 10 minutes

Why credit originally started (for farmers and businesses)?
Compare and contrast that to how people use credit today
for everything. Give examples such as credit cards, gas cards, cars, homes,
etc. Tie this conversation into the next stage of direct instruction.

c. Direct Instruction – 15 minutes

T-Chart
(Advantages of Credit) Can greatly expand purchasing
potential; Raise your standard of living; Emergency funds (West Virginia
story); Convenient; Safer
(Disadvantages of Credit) – It MAY cost more than cash
purchases – there is a fee for using credit card machines and often this is
passed on to the consumer; Finance charges (total dollar amount of all interest
and fees); You tie up future income (go over debt/equity ratio); Can lead to
overspending

d. Direct Instruction – 20 minutes

Character is a person’s honesty and reliability determined
by their history of repaying bills on time.
Capital is an evaluation of a person’s net worth.
Capacity is the income a person has available to repay the
loan determined by job longevity and having few other loans.
Collateral is property which can be seized if a person does
not repay the loan.
Conditions refer to the general state of the economy.

If an individual has these qualities, he/she is more likely
to be perceived as having the ability and willingness to pay back a loan and
will be granted one by a lender.

e. Video Assisted Learning – 25 minutes

Students will learn how credit almost destroyed the
American economy in 2008 - http://www.crisisofcredit.com/

Materials:

KWL Graphic Organizer;
Credit Terms PowerPoint Outline for students
Appropriate technology

Assessment:

Inquiry Questioning

Download:

Credit Terms.ppt