Week 02, Class 05
Credit Cards and APR
Borrow, protect and grow your money
Credit is the most available financial product a teenager will be offered and the least explained. Card offers arrive early, often before eighteen, and the terms are written to be missed.
This class walks through how credit cards actually work: limits, billing cycles, APR and minimum payments. Then students calculate what a carried balance really costs, month after month, until the price of borrowing is a number they have computed themselves.
Topics covered
- How credit cards work
- Credit limits and billing cycles
- APR
- Minimum payments
- The real cost of carrying a balance
- Responsible credit card use
The practical activity
The credit repayment comparison: students take a hypothetical balance and calculate the total cost of paying it off at minimum payments versus a fixed monthly plan.
The learning outcome
Students can calculate the real cost of carrying a credit card balance and explain why minimum payments are expensive.