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Lesson description
Students explore and investigate the diversity of consumer rookie errors associated with using a
credit card to purchase goods and services. Learning begins with watching the MoneySmart
Rookie: Credit hangover video. Students then discuss and reflect on the pros and cons of credit
cards, interest charges and where to seek assistance with managing credit card debt and
repayment issues.
In the second part of the lesson students complete an activity worksheet to investigate the
necessary precautions and knowledge to avoid making credit card rookie errors.
* Please note that this lesson plan has been aligned with the draft Economics and business curriculum.
This mapping will be confirmed when the curriculum is endorsed.
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Task 2: Discussion
Discuss answers with students. Suggested responses are:
Credit is borrowed money that must be paid back after you use it along with any interest, fees and
charges that may apply.
Different types of credit include credit cards, store cards, personal loans, interest – free deals and
home loans.
The amount you can borrow will depend on the your income, your expenses and what you can
afford to pay back
Credit cards can be useful for making purchases online, overseas or when you don’t have cash
especially if you can pay them off by the due date which is an interest free period.
It might take more than 35 years to repay an original loan of $5000 if you only made the minimum
repayment every month because of interest and it would cost you more than $18,000.
A credit report details your credit history, including every time you have applied for credit, defaulted
on a repayment and missed a payment. It is held by a credit reporting agency.
If you happen to get a bad credit report it may affect your chances of getting other loans in the
future, such as for a car or house.
Contact your credit provider if you have a problem with repayments. Free financial counselling is
available if you run into problems with credit. A financial counsellor can help you work out a
repayment plan.
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Resources
1. MoneySmart Rookie Credit hangover video
2. Data projector/TV and DVD player or computer
3. Credit and debt convo
4. Activity worksheet/s
5. Computers with internet access
6. ASIC's MoneySmart and MoneySmart Teaching websites
Additional resources
This lesson plan is part of the MoneySmart Rookie suite of resources for educators which can be
accessed at: http://teaching.moneysmart.gov.au/resource-centre/moneysmart-rookie-for-educators.
Other topics include:
First car
First job
Mobile phone ownership
Moving out of home
Online financial transactions
The Under 25s section of the MoneySmart website has additional MoneySmart Rookie materials for
young people including case studies, videos, tips and tools and calculators. These can be accessed at:
https://www.moneysmart.gov.au/life-events-and-you/under-25s
The MoneySmart Teaching secondary package has a number of units of work related to this lesson
plan. The package can be downloaded for free at: http://teaching.moneysmart.gov.au/professional-
learning/moneysmart-teaching-packages.
The Financial Health for Teachers personal learning program is designed to inspire and empower
teachers to take charge of their financial lives and of the choices they make as consumers. Read current
issues, or subscribe at http://teaching.moneysmart.gov.au/professional-learning/financial-health-for-
teachers.
The Australian Taxation Office has developed Tax, Super and You, a resource to guide students
learning about their future tax and superannuation obligations at http://www.taxsuperandyou.gov.au/.
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NAME: ___________________________________________
Using the ‘Credit hangover’ video, answer the following questions:
1. What is credit?
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3. How do you work out how much credit you can afford?
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5. Explain what happens if you pay the entire amount owed on a credit card by the due date.
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6. Explain what happens if you only pay the minimum balance owed each month on a credit card.
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7. Why is it the case that if you paid $5000 for a used car using your credit card and only made the
minimum repayment every month, that it might take more than 35 years to repay the original loan and
cost you more than $18,000?
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Links to the Australian Curriculum and National Consumer and Financial Literacy Framework
Mathematics
Evaluate statistical reports in the media and other places by linking claims to displays, statistics and
representative data (ACMSP253) (Statistics and Probability/Data representation and interpretation).
ASIC’s MoneySmart Teaching initiative builds the consumer and financial literacy capabilities of Australian school
students by developing students’ knowledge, skills, values and behaviours to enable them to make confident,
informed consumer choices and responsible financial decisions that are essential to their future financial wellbeing.
To view the MoneySmart Teaching Primary and Secondary packages and all the online and digital resources visit
www.teaching.moneysmart.gov.au
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