Money

Banking, Credit & Debit Cards

​Learning Objectives:

• Identify different bank accounts

• Recognise the pros and cons of Credit and Debit cards

Match

Guess the Logo

Lloyds Bank

Monzo

Barclays

Mastercard

American Express

• Lloyds Bank

• Monzo

• Barclays

• Mastercard

• American Express

Open Ended

What are the different types of bank accounts available? Write a brief description of each

Credit Cards

•Credit cards are a useful way to be able to borrow money from the bank.​

•They allow you to take out a 'loan' to help you manage payments.​

•Different cards will have different allowances and different interest rates.​

Open Ended

What are the dangers of using Credit Cards?

• Credit cards can lead to some pretty big fees if you're not careful.

• By missing one payment, your interest rates can increase very quickly, making it increasingly difficult to pay back.​

• This can then make it difficult to borrow money in the future.​

• Debt risk

• Interest charges

• Temptation to overspend

• Possible annual fees

​Con's:

• Credit building opportunities

• Rewards and benefits

• Purchase / Fraud Protection​

​Pro's:

​Debit Cards

With Debit Cards, you can only spend what you have in your account, though some banks will let you overdraw, then charge you an overdraft fee. It is worth checking if this applies your bank and, if so, changing it so you cannot overdraw.

Debit Cards have limited fraud protection, so if you are a victim of fraud, you might be responsible for paying up to £500 of the fraudulent charges.

Multiple Select

What are the benefits of Debit cards?

• Spending control - You can only spend what you have.

• They do not affect your Credit score

• Debit cards do not charge interest

• No charges for taking money out of the account

​Interest

• Interest is the fee credit card companies will charge for using their cards.​

• These fees are charged each month and will have options on how much you pay back.​

• When you don't pay back what you've borrowed, the you will be charged.​

• The longer the fee is unpaid, the bigger the future fees.

Good Debt vs Bad Debt

Debts are considered either 'good' or 'bad' because different debts affect how lenders consider you.
This is because some debts show that you are capable of borrowing and paying back money long term which in turn shows that you are responsible with your money.
Other types of debts, however, can show that you are less capable of looking after your money and so are riskier to lend to.
'Good debt' is something that allows you to achieve meaningful personal goals or long term financial gain.
'Bad debt' is for things such as taking on debt to make unnecessary purchases or borrowing an unaffordable amount.

Categorize

Options (15)

Mortgage

Student loan

Business loan

Payday loans

Credit cards

Interest free loans

Car finance

Mobile phone finance

Holiday loans

Home equity loan

Personal loan for education

High-interest personal loans

Rent-to-own agreements

Store credit

Debt consolidation loans

Organize these options into the right categories

Good Debt

Bad Debt

Somewhere in the middle

Multiple Choice

Which term describes your bank account if the balance drops below £0?​

• Underbalance

• Overbalance

• Overdraft

Multiple Select

Why is your credit rating important?

• Lenders will consider your rating when deciding on whether to lend you money​

• It can impact on the interest rated lenders set for you

• Your rating can affect how likely banks and building societies are to give you a mortgage to buy a house​

Multiple Choice

Which of the following could have a negative impact on your credit rating?

• Living at the same address for a long time​​

• Missed payments on a credit card​

• Having a credit card

Multiple Choice

Which of these is the most important bill to prioritise if you are in financial difficulties (pay first) ?

• Council tax

• Mobile phone

• Water

• Credit card

​Consequences of missing bills

​Rent: You could be evicted from your home.
TV Licence: You will have to pay a court fine.
Gas / Electricity: Your supply will be cut off. You may be given a pre-payment meter, which will be more expensive than standard billing.
Council Tax: A Court appointed officer can be sent to take your possessions to sell to pay off your debt. Money could be taken from your earnings or you could be sent to prison.