Some people have a hard time qualifying for a loan, while others can walk into a bank empty-handed and leave with thousands of dollars in credit. The same goes for credit cards—although most consumers carry several, for an unfortunate few they are out of reach. But no matter how easy or difficult it is to borrow money, one thing is certain: paying it back is the real challenge.
This program helps high school and college-level viewers understand the basics of financial credit systems, the best ways to obtain and manage credit, and how credit decisions can influence one’s future. Focusing on credit cards, car loans, student loans, and mortgages, the program offers lighthearted dramatizations that first illustrate good and bad borrowing and spending habits—and then highlight discipline as the key to a great credit rating and sustained financial health. Students will also encounter the four Cs of lending: capacity, credit, capital, and collateral.
1. What Is Credit? Credit is a loan that must be paid back with interest over a specific length of time. Banks and financial institutions rate a person's credit rating. Students are urged to make good financial decisions at all times.
2. Bad Credit Decisions A young man takes out loans to pay off his credit card debts. Another young man knows people are looking for him because of the debts he has created.
3. Value of a Personal Budget The purpose of a personal budget is that is allows people to know how they are spending their money, what behaviors to change, and how to make financial decisions. Experts advise all young people to save money each month.
4. Impulse Buying and Long-Term Credit Card Debt Impulse buying often leads to reckless use of credit cards and long-term payments with interest. Impulse buyers should slow down and think about what the real cost is of instant gratification.
5. Credit Card Payments Though credit cards are convenient, they always carry interest charges--and add to the cost of purchased item. Before buying with a credit card, shoppers must make sure their personal budget can handle the payments.
6. Negative Credit Ratings A credit rating is a score based on a person's behavior patterns when paying back a loan. Paying on time is essential to get a good credit rating. Payment history makes up nearly 35% of the total credit score.
7. Lending Institutions Rate Borrowers Lenders use four factors that measure one's ability to pay back a large loan: capacity, credit, capital, and collateral. The bank may require a co-signer on a young person's first loan.
8. Good Credit and the Future Building good credit can be a significant factor in getting a quality education and buying a home. Credit ratings follow a person into the future. This segment offers sound advice for people seeking loans.
Taking Credit: Understanding Loans, Credit Cards, & Other Debts! (DVD)
Time: 25 Minutes