Credit Cards & Smart Use for Teens

Credit Cards and Smart Use for Teens

By Laura Bonilla

Learning Objectives

By the end of this lesson, students will:

• Understand how credit cards work

• Know the key terms (APR, credit limit, minimum payment, etc.)

• Learn smart strategies for managing credit as a young adult

• Analyze the risks of misuse and debt accumulation

Open Ended

🧠 Scenario: "You want to buy a $300 video game console. You don’t have the money right now, but you have a credit card. Do you buy it now and pay later, or wait?" What would you do? Why?

Pulls from money you already have.

​Debit Card

A credit card lets you borrow money from a bank to make purchases.
You must pay it back—often with interest

Credit Card

What is a credit card?

Labelling

Label the parts of a credit card.

Drag labels to their correct position on the image

signature spot

CVV or CVC

expiration date

credit card number

Chip

Match

Match the definitions.

• Credit Limit

• APR

• Minimum Payment

• Balance

• Interest

Max amount you can spend with the card.

Annual Percentage Rate: interest charged

Smallest amount you pay monthly.

Total amount you owe.

Extra cost you pay for borrowing money

• Max amount you can spend with the card.

• Annual Percentage Rate: interest charged

• Smallest amount you pay monthly.

• Total amount you owe.

• Extra cost you pay for borrowing money

📌 Tip to show: Paying only the minimum = paying much more over time!

Smart Credit Card Tips

• Keep utilization low. Don't max out your limit.

• Check your statements and credit score.

• Use automatic payments to avoid late fees or set calendar reminders.

• Only charge what you can afford to pay off.

• Always pay in full. On time.

• Start with a low-limit student card (once 18+).

💳 Assumptions: $1,000 balance at 18% APR

This chart shows:

• Blue Line: How many months it takes to pay off the debt at different monthly payment levels

• Red Line: The total interest paid for each payment option

🔍 Key Takeaways for Students:

• Paying only $30/month means a long payoff period and high interest

• Increasing your monthly payment significantly reduces total interest and gets you out of debt faster

• Smart planning = saving money!

​

Impact of Monthly Payment on Credit Card Debt

Match

Myth or Fact.

Go in order from left to right.

• “You should carry a balance to build credit.”

• “Missing one payment can hurt your credit score.”

• “Credit cards are free money.”

• “You can avoid interest by paying in full.”

Myth

Fact

Myth

Fact

• Myth

• Fact

• Myth

• Fact

Multiple Choice

What happens if you only make the minimum payment?

• Your credit limit increases

• You avoid paying interest

• You pay off the card faster

• You’ll pay more interest over time

Open Ended

What’s one thing about credit cards you didn’t know before today?

Open Ended

What strategy would you use to stay out of credit card debt in the future?