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| Reviewed: |
Dec 13, 2007 by Business Editorial Board |
| Overview: |
Using credit cards is convenient, user friendly, and at times dangerous. In this lesson students learn the joys and dangers of using credit as they help Credita, the main character, solve her credit problems. Q T Pi Fashions Learning About Credit Card Use is a lesson plan that includes two practice exercises and links to reference materials. Follow-up assessment activities using the reference links are suggested. Topics covered include introducing credit terminology, incentives for providing credit, performing simple calculations on credit transactions and analyzing the results of spending patterns. A student worksheet and teacher's solution are also provided. The lesson plan meets standards 1, 2, 4, and 8 of the National Council on Economics Education. |
| Learning Goals: |
Students will be able to:- Define the relationship between credit and incentives for buyers when purchasing goods and/or services.
- Define the relationship between interest and incentive for borrowers when purchasing goods and/or services.
- Analyze the pros and cons of credit card use.
- Describe how finance charges effect the purchases of items.
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| Target Student Population: |
Grade levels 6 - 12 |
| Prerequisite Knowledge or Skills: |
An understanding of credit terminology would be helpful but not essential. |
| Type of Material: |
Lesson plan with practice activities. |
| Recommended Uses: |
In class lecture or cooperative learning pairs |
| Technical Requirements: |
Browser and Adobe Reader (PDF) software |
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| Strengths: |
This module emphasizes the dangers of credit spending which encourage the buy now and pay later mentality where purchasing on credit can get out of control. Students gain a better understanding of the potential problem associated with credit purchases by working through two exercises. The module employs the discovery approach to learning in terms of introducing credit related terminology. Concepts are integrated well. |
| Concerns: |
The module has students examine credit terminology with the expectation that students discover meanings on their own. Feedback will need to be provided by the instructor to ensure students have the correct definitions and understanding of concepts. The Teachers Copy does not include definitions or explanations of terms/concepts. For instructors who do not ascribe to discovery learning, this approach may be considered a concern. Mathematical inaccuracies exist in the teacher's solution mainly due to rounding errors. The thousandths position is truncated in most cases, which is incorrect treatment. An amount of .10 should be rounded to .11 if the thousandths position is 5 or greater. An error exists in the instructions for the Student Verion. It is located in Item 2 of the "Process:, Note:, For computational purposes, section where it says, "The 1.75% interest and finance rate has been rounded to a .081 multiplier." The ".081" should read ".018". The data is correct in the instructor version.The module also lacks a suitable summarization of concepts being taught. |
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Potential Effectiveness as a Teaching Tool |
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| Strengths: |
Basic terminology is covered first, then learners work through a real life scenario which helps them relate to the concepts being taught. Students are required to develop their own solutions for using credit wisely, which helps to reinforce learning. Links to reference material provide additional resources where students can discover the real costs of debt, what is required to pay off ones credit card, the true cost of paying the minimum amount, etc. The module is particularly good for explaining the impact of interest rates and what can happen very quickly when account balances are not paid off during the current billing period. |
| Concerns: |
While not necessarily a concern, the module is designed to be facilitated by a teacher. While some of the activities can be done independently, other activity requires group/teacher input. This feature limits the usability of the module to a classroom or group setting that must be facilitated by a teacher. Because students are asked to write a conclusion which would generate discussion about how to use credit wisely, responses will vary from class to class. As a result it would be useful to capture some key conclusions or summary in the Teachers Copy so that a guide is provided as to the key points that should be captured. |
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Ease of Use for Both Students and Faculty |
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| Strengths: |
This module is fairly easy to use. Visual appeal is very good. Students are able to use this model with very little instruction. The exercise will encourage a lively group discussion of the perils of credit purchases (engaging). |
| Concerns: |
Although this module is online, no online interactivity is included with the content. For example, the worksheet (in pdf) has to be printed out and calculations performed manually. Since a student version can be accessed online, it would make sense to have the worksheet, particularly for the calculations of credit card payment schedule be electronic as well as well. Having an electronic spreadsheet available would help facilitate what if scenarios which students can use when developing advice for Credita on the smart use of credit e.g., increasing the monthly payment to more than required minimum amount. |
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