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Activity: Credit Activity Using Authentic
Materials
Description of the Process
The students worked in small groups to
compare credit card applications I had collected from various
banks and from my own collection of junk mail. I wanted
them to understand the questions that a potential credit
card holder would be asked to provide, and I wanted them
to critically analyze why the creditor might want this information.
The students’ responses were sharp and on the mark.
For instance, one student knew that sharing a Social Security
number with the creditor would give the creditor access
to the applicant’s credit history. Another student
noted that the company would want to know where to send
the bill and that that was the simple reason for asking
for an address.
Later, the students and I collected bank
brochures describing the personal banking services offered
by different banks. We compared the costs of checking and
savings accounts. Many of the students were surprised to
see that bank fees varied, not only from bank to bank, but
also from one checking account to another within the same
bank. We talked about the factors to consider in choosing
which account is best suited to one’s personal financial
habits.
During the next lesson, the students used
a copy of the Suburban Real Estate News to familiarize themselves
with listed house prices and the kinds of down payments
that a given selling price would require. And for one of
our final lessons, we viewed a videotape of the Lynn real
estate cable channel. The students watched the video clip
for selling features of the houses. They rewound the tape
and listened, repeatedly, to catch words and phrases. They
helped each other interpret “real estate-ese”
into English, and they analyzed misleading and coded advertising.
One of the most significant lessons was
the eye-opening “28 percent rule” that another
class had also confronted during these lessons. As students
looked over two bank pamphlets about the mortgage process
and mortgage financing options, they were struck by the
bank’s assertion that “one’s mortgage payment
should not exceed 28 percent of one’s gross annual
income.” We hypothesized what that would mean for a
person working full-time at $10/hour. We calculated the
maximum mortgage payment allowable under the “28 percent
rule,” and having already completed the amortization
table exercise in which the class looked up the monthly
payments at current interest rates for houses on the market
locally, students’ “dream houses” seemed
even more like dreams. We were grounded, reminded that affordable
housing is limited. This was an important step in learning
about the value of one’s money and the cost of home
buying.
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