Legacy: Understanding Credit

What is credit?

• Money you give to your friends

• Money you borrow and promise to pay back

• Free money from the government

• A type of savings account

Who provides credit to people?

• Your school

• Banks and credit card companies

• Grocery stores

• Your parents

When you borrow money, what is it called?

• A donation

• A gift

• A loan

• A deposit

What is a credit card?

• A card that earns money

• A card you use to buy things with your own money

• A card that lets you borrow money to make purchases

• A store loyalty card

What happens if you don’t pay your credit card bill on time?

• Nothing

• You earn bonus points

• You are rewarded

• You may be charged interest or a late fee

What is interest?

• Free money

• Money the bank gives you as a gift

• Extra money you pay for borrowing

• A game you play

What is a credit score?

• Your GPA in school

• A number that shows how well you manage money and credit

• Your test score in math class

• The amount of money in your wallet

Why is having a good credit score important?

• So banks trust you to borrow money

• So you can get more followers on social media

• So you don’t have to go to school

• So you can buy snacks at school

What can help build a good credit score?

• Paying bills late

• Ignoring your credit card balance

• Paying on time and keeping your balance low

• Spending more than you earn

What does it mean to “default” on a loan?

• You paid it early

• You paid extra

• You got a refund

• You failed to pay it back