| | 4th grade student can: Credit is a basic financial tool. Borrowing money to buy something usually costs more than paying cash because there is a fee for credit (interest). Responsible borrowers repay as promised, showing that they are worthy of getting credit in the future. | 8th grade student can: Comparing the costs and benefits of buying on credit is key to making a good purchase decision. For any given loan amount and interest rate, the longer the loan period, the smaller the monthly payment and the larger the total cost of credit. Consumers can choose from a variety of credit sources. Credit bureaus maintain credit reports, which record borrowers’ histories of repaying loans. Sometimes people borrow more money than they can repay, which can have consequences such as the repossession and garnishment. | High school graduate can: Leasing, borrowing to buy, and rent-to-own options have different contract terms and costs. Making minimum payments on credit card balances increases the total cost and repayment time. Understanding credit card disclosure information is key to controlling borrowing costs. Consumers with excessive debt have a number of options, including loan consolidation and renegotiation of repayment schedules. Bankruptcy provides debt relief, but has serious negative consequences. Negative information in credit reports can affect your financial future. Laws and regulations offer specific protections for borrowers. |