Monday 14 May 2018

Planning 10 - Lesson #28

Lesson #28 - Credit and Debt

Borrowing money is something that almost all of us will do in our lifetime.  We may need to borrow money to buy a car, go on to post-secondary education, buy a house, etc.

One of the most common types of "loans" comes in the form of a Credit Card.  A CREDIT card is different from a DEBIT card in several ways.  Watch the link below to understand this difference.

Credit Cards vs. Debit Cards

Banks and Credit card companies are keen to loan money because along with the loan comes an extra charge called INTEREST.  Interest is extra money in addition to what you have borrowed ... that is how the bank or credit card company continues to stay in business and make money.  Mom and Dad may be willing to lend you money without charging interest, but a business will not.  The RATE of interest charged on bank loans (used for car, schooling, etc.), mortgages ( used for houses) and credit cards can vary significantly.

It's important that when you do decide to borrow money that you have a plan to pay back.   And, usually the faster you can pay it back the less it will end up costing you.

Where people often get into trouble with CREDIT cards is they spend and spend without thought of how they will be paying this money back.  This can be a very costly mistake.  Watch the video at the link below to understand the negative consequences of using a credit card and NOT paying it off each month.  Not only can credit cards be incredibly costly, they can also limit your ability to borrow money in the future, if not used responsibly.

Credit Card debt using a glass of water

ASSIGNMENT

Complete the worksheet found at the link below.

Credit and Debt Worksheet

Submit your assignment;
  • by sharing it with me on Office 365 OR
  • placing a hard copy in the Planning 10 folder in the office