Credit Cards

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NGPF Podcast: Tim Talks to Author, Columnist and Personal Finance Advocate Beth Kobliner

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I had a great conversation with Beth Kobliner recently. Beth has an incredible personal finance focused CV. She’s been a columnist at Money Magazine, authored one (and soon to be two) New York Times Bestsellers (Get a Financial Life: Personal Finance in Your Twenties and Thirties), served on the President’s Advisory Council on Financial Capability, and gave financial advice to Elmo on Sesame Street (and a whole lot more too)! In this NGPF podcast, Beth shares the money lessons she learned growing up in Queens, New York as well as the motivation for her latest book, Make Your Kid a Money Genius, to be released in February. You will benefit from Beth’s insights on how to invest, use credit cards wisely and a simple test to control those impulsive purchases. Parents will find Beth’s new book a godsend in describing developmentally appropriate actions to build that financial decision-making muscle that your children need to thrive in this financially complex world. Enjoy!

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Question: How Much Debt Do Consumers Have?

A great opener to your Types of Credit unit. Start by asking your students to rank from largest to smallest the various types of consumer debt:

  • Credit Cards
  • Mortgages
  • Auto Loans
  • Student Loans

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Answer and visual below (from Visual Capitalist and Equifax): $12.4 trillion (as of August 2016)

In My Financial Life: A Nudge in the Wrong Direction

I had one of those annoying situations occur over the break. I got an email (which I missed) from my credit card company notifying me that my automatic payment from my checking account had been returned by my bank. Something about a bad account number which was the SAME account number that I have used to pay the balance on my card (successfully) dozens of times.  You know the drill from here with credit card companies, if your payment is not made on time, the late payment kicks in and interest charges and a higher penalty APR comes along for the ride. As a customer who had NEVER made a late payment on this card, I was confident that  a phone call would reverse all this nastiness and it DID (I blogged about how to negotiate your everyday expenses last year and that advice came through). Phew!

So, when I went to reset my automatic payment on my credit card back to the same account number that I have used countless times, I was dismayed to see this:

Question: How Much Are The “Big 5” Credit Card Companies Spending on Rewards Programs?

From Financial Times (sub. required):

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Answer: A LOT! Almost $23 BILLION in 2016 based on estimates from Instinet

These reward programs provide cash back or points (that can be exchanged for goods or services) to cardholders based on their spending habits. The FT article answers a few questions that students might have:

NGPF Podcast: Tim Talks to Retired Bankruptcy Judge John Ninfo About His Passion For Financial Literacy

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What does a retired bankruptcy judge do to fill his “golden years?” If you are Hon. John Ninfo, you write a weekly column and visit hundreds of classrooms in upstate New York to teach young people about what it means to be financially responsible. If that isn’t enough, he also created a non-profit, Credit Abuse Resistance Education (CARE), to bring bankruptcy professionals into classrooms throughout the U.S. to share their experiences. Storytelling has an important place in the personal finance classroom (it is personal after all!) and John’s years on the bench in western New York provide him with lots of material to share about the causes of financial distress. In this podcast, you will also hear from the CARE team of Anna Flores and Ian Redman about how you can bring CARE to your classroom. Enjoy!

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Amy McCabe, NGPF Fellow, recommends 2 game platforms — Kahoot and Quizizz

It’s a special occasion here on the NGPF blog — a guest piece by NGPF Fellow Amy McCabe! We know that hearing from us is one thing, but hearing from a fellow teacher, who’s in the classroom day in and day out, is a whole different ballgame! Amy’s an economics and personal finance educator at Culpepper County High School in VA, and sends along this review…

Question: What Percentage of Millennials Have Credit Cards?

Answer (hat tip to Sarah Tavel of Greylock again): Only 37%. 

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Check out this NGPF Activity in which students are given consumer profiles and asked to determine whether or not they should get a credit card. Also, this NGPF Case Study: Tale of Two Credit Scores provides students with information on alternative ways to establish a credit history.

 

Chart: How Do Debt Levels Differ By Age?

Here’s a meaty set of charts to include in your Types of Credit unit. I love it because it provides a more holistic view of the various types of debt that consumers have and how their balances vary over an adult’s life:

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Hat tip to Sarah Tavel of Greylock Partners who included this chart in her excellent presentation “Saving people money.”

First, some orientation is in order.