Credit vs. Cash

​What do I need?

• Ipad

What is

human capital?

Human capital is the skills,
knowledge, and experience a
person may have which shows
their value to a country or
organization.

Multiple Choice

Which of the following includes the knowledge, skills, education, and talent people bring to work?

• Capital resources

• Natural resources

• Financial capital

• Human capital

Multiple Choice

Which of the following improves human capital?

• Shopping Habits

• Education

• Age

• Family Size

Okay…so…

what is labor?

Labor is the hard work, strong
effort, or struggle one performs
in order to complete a task that
pays the worker an income.

Multiple Choice

What is the work that a person does to earn an income?

• Labor

• Income

• Credit

• Salary

What is an

income?

Income is money received in
exchange for providing
a good or service. It might
also be called a salary, wage
or earnings.

Multiple Select

What is another word for income?

• Hours

• Salary

• Services

• Wages

• Earnings

​Availability

Having an abundant amount of goods and services compared to human wants.

​Scarcity

Not having an abundant amount of goods and services compared to human wants.

Multiple Choice

The most popular toy for Christmas is the MegaScooter2000. Stores can’t keep them in stock. Back in September the scooter cost $99. Now it cost $175

Is this scarcity or availability?

• Scarcity

• Availability

Multiple Choice

It was the end of the bake sale and we still had $100 of cupcakes. Instead of selling them for $1 each, we put them on sale for $0.50.

Is this scarcity or availability?

• Scarcity

• Availability

In this lesson, we will explain that credit is used
when wants or needs exceed the ability to pay and
that it is the borrower’s responsibility to pay it back
to the lender, usually with interest.

​When we use cash, we are using money that we have to pay for goods or services at the time of purchase.

Multiple Choice

To take or receive something with a promise of returning it

• Borrow

• Lend

Multiple Choice

To let out your property for temporary use understanding that it will be paid or given back

• Borrow

• Lend/Lender

​When we use credit, we are borrowing money from the bank. Banks will allow you to borrow their money as long as they get something in return....

​....sooo they charge interest. All credit cards require interest.

Multiple Choice

Which of the following best describe interest?

• Amount of money that is borrowed

• Amount of money borrowed that must be repaid

• Amount of money paid for a purchase

• Amount of money paid to a lender over time for the use of borrowed money

Multiple Choice

Which statement best describes a credit card?

• Money that is borrowed and does not have to be paid back

• Money that is given to people.

• Money that is borrowed and us usually paid back with interest.

• Money that people earn at their jobs.

Multiple Choice

Which is an example of a person using a credit to make a purchase?

• Carmen uses a credit card to purchase a video game system for $300. She must pay the bank the $300 plus interest.

• Hector takes out $100 from his bank account to purchase a new pair of shoes.

• Alejandro’s dad paid him $25 to clean the yard. Alejandro used the money he

  earned to purchase headsets.

• Rebeca had a $10 bill in her purse. She gave the $10 bill to her daughter as a

  birthday gift.

Responsible borrowers will find it easy to
get credit next time. But if a borrower is
irresponsible, it will be difficult to get
credit again and the interest may be more.

So….what if the

buyer doesn’t keep

the agreement?

Using credit can be very helpful if the cost
of the purchase is more money than you
have at the time but buyers must be
responsible or it can be very costly.

Choices… Choices... Choices...
When I buy goods or pay for services,
I can choose to pay cash, write
a check or use a credit card.

Discuss when and why using
cash or credit might be the
best option.

I need your help…

The only money I have is hidden away in my desk
drawer. I just counted all the bills and found that it
totals $160 plus some change. I want to save
$50 and give my brother $40 for participating
in the charity fundraiser at school.
If I want to buy a cool jacket on sale for $85
should I use a check, cash, or credit? Is it
better to wait till I have more money or
maybe decide not to buy it at all?

Turn to the person next to you and discuss
the best option.

Time to Work!

Show me

What you know!

Multiple Choice

Andy is starting a new job tomorrow that requires him to wear a white shirt. He found a white shirt at the store. He does not have enough cash to pay for the shirt and is not sure how much money is in his checking account.

 

Which statement describes the most reasonable choice Andy could make in order to buy the shirt today?

• He could use his credit card since he does not have the money needed with him at the time of purchase.

• He could write a check for the shirt and hope that he has enough money in his checking account.

• He could phone a friend and ask to borrow the money needed to buy the shirt.

• He could tell the sales person that he doesn’t have the cash to pay for the shirt and ask if he can take the shirt home today if he promises to come back next week with the cash.

Multiple Choice

Oliver borrowed $4,500 from a bank to purchase items for his business. He paid the

bank back $5,200. Which is the most likely reason Oliver paid the bank more than

what he borrowed?

• Oliver made a mistake in calculating the amount of money he needed to pay

  back.

• Oliver had to pay interest on the amount of money he borrowed.

• Oliver needed more than $5,200 to purchase items for his business.

• Oliver had to pay state taxes on the money he borrowed.

Multiple Choice

Tony was watching a TV commercial about a video game. He talked to his mom about the game.

 

Tony: Mom, I want this game. Will you buy it for me? Mom: I do not have money for it. Tony: Can you just use your credit card? Mom: That is not a good idea.

 

Which is most likely the reason Tony’s mom thinks that using a credit card to buy a game is not a good idea?

• Because most places that sell video games do not accept credit cards.

• Because Tony would think that he can use his mom's card anytime he wanted something.

• Because the credit card company is far from Tony’s home.

• Because Tony's mom would eventually have to pay for the game and also pay interest.

Multiple Choice

It is winter and the heater in Joseph’s house is not working. The cost to repair the heater is more than Joseph has in his bank account.

 

Which statement does NOT describe why Joseph may decide to use his credit card to pay for his heater repair?

• Joseph did not plan to spend money repairing his heater.

• Joseph is not responsible for any charges he makes on his credit card.

• The temperature in the house will be too cold without a working heater.

• Joseph knows he will be able to pay the credit card balance quickly with little or no interest.

Multiple Choice

A group of four friends recently took out loans to help pay for the cost of college

expenses. The cards the four ways that the friends borrowed money and the amount

they paid back.

Which friend paid no interest on the amount of money they borrowed?

• Leo

• Veronica

• DeAnna

• Ian