Introduction to Credit Cards for Kids and Teens
This video explains the concept of credit cards in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about them, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Kindergarten
- Elementary School
- Middle School
- High School
The topics covered are:
- What is a Credit Card
- What is the rate of interest
- When do you pay back the money
- What are the benefits and rewards
- Where can you get a Credit Card from
- What are the factors to consider while selecting a credit card
- What if you cannot repay the money
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Howdy Wall St. Willy! I saw someone using a credit card at the mall. But…
What is a credit card anyway?
Well, a credit card is a plastic card that you use to pay at stores and online.
But where does that money that you use to pay come from?
Well, a bank lends it to you but you have to repay that money. If you repay late, then you’ll be charged interest.
Awww!
How much interest do you get charged?
Well, it is one of the costliest forms of credit – so you get charged between 14% and 28% interest per year. But to qualify for a lower interest rate, you need a higher credit score.
Is there any other fee?
Yes, some credit cards have a $25 to $500 annual fee, which is every year.
How long do I have to pay back the bank?
Normally you get 30 days where you are not charged interest but after that you’ll be charged interest.
What are the benefits of a credit card?
Well, you get free credit for up to 30 days, you get the convenience of not carrying any cash and you can consolidate or combine all the payments into one.
You can also get rewards.
What kind of rewards?
The rewards can be in the form of points or miles. They can be exchanged for different things like cash back, airline tickets and merchandise.
Where can I get a credit card from?
Well, you can get them from banks, credit unions and credit card companies.
You can apply for them online by visiting their website. You need your address and Social Security Number.
But instead of going through all that hassle, can I just make my own credit card?
YOU CANNOT!
Okay Okay Okay!
Well, what should I consider while choosing a credit card?
Well, you should consider the interest rate (the lower, the better), the annual fee if it has any. But, if it does, then the lower the better.
And rewards – depending on what you do more, you can choose between a mile card or a cash back card.
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Well, what if I cannot repay the money?
Well then, the credit card debt will keep on piling up because of the high interest rate. That would also negatively impact your credit score.
That’s not good. Can anything be done in this situation to help make it better?
Yes, but that’s a topic for another time.
Thank you very much for explaining to me what a credit card is, Wall St. Willy.
You are welcome, Sooper Cooper. Remember, Finance is Your Friend!
Video Featured in the Below Financial Literacy Course for Kids & Teens
Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens
Podcast: What is a Credit Card?
Fun, informative and concise episodes by a 10-year old, breaking down complex financial concepts in a way that kids and beginners can understand. Episodes cover personal finance topics like saving, investing, banking, credit cards, insurance, real estate, mortgage, retirement planning, 401k, stocks, bonds, income tax, and more, and are in the form of a conversation between a cowboy (a finance novice) and his friend, a stock broker. Making finance your friend, only at Easy Peasy Finance.
A little bit about me: I have been fascinated with the world of personal finance since I was 6! I love to read personal finance books, and keep myself updated on the latest by reading various personal finance magazines. My friends often ask me questions about finance because they find it complex and intimidating. That’s what inspired me to start my YouTube channel called Easy Peasy Finance when I was 8, and this podcast 2 years later.
All you need to know about a Credit Card: what is a credit card, where does the money that you use to pay come from, much interest do you get charged, what are the charges and fees for credit cards, how long do you have to pay back the bank, what are the benefits of a credit card, what kind of rewards do credit cards offer, where can I get a credit card from, what should you consider while choosing a credit card, what if you cannot repay the money or the credit card bill, and more.
Show notes and transcript at: https://easypeasyfinance.com/what-is-a-credit-card/
