Ramsey Classroom Chapter 4, Lesson 1

 Main idea: You might think debt is normal and the only way to have everything you want.  But the reality is,

• debt makes businesses a lot of money, and you're stuck with the bill

• everybody has debt so what's wrong with it?

• debt is debt.

• you have to borrow money all the time.

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You know what those ads don't show?

• People having a good time.

• People making payments for months and years for all that stuff.

• Young people, good times and insurance!

• Out of work farmers.

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What is debt?

• Saving money

• buying property and houses

• Spongebob Squarepants' house

• money owed to another person or company

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Credit is a big business that...

• makes lots of money for credit card companies, banks and other vendors.

• saves people money all the time.

• looks out for the poor people.

• fixes problems right away.

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When a lender offers you credit...they're offering you...

• the power to influence people.

• the opportunity to borrow their money.

• the chance to win a vacation!

• the ability to write a novel.

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Once you turn 18 years old, you become...

• a target of credit card companies.

• a complete adult.

• a book keeper.

• a government official.

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Your low- or zero-interest time period is _______, that's what "introductory rate" means.

• long-lived

• for the life of the loan

• atypical

• temporary

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Minimum payments cover your____, but you're barely making a dent in the ________.

• first payment/purchase

• interest charges/actual debt total

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Credit card companies love this (minimum payments) because...

• it keeps you in debt for years.

• you pay everything up front.

• you make a new friend.

• everybody does it.

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Cash back: if a car "gives you back" 1.5% of every dollar you spend, that's only...

• .05 cents back.

• $40 dollars back.

• $1.50 for every $100 you spend.

• $864 cash back every month.

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