Level Up Your Financial Skills

Level 3: Lesson 3 – Credit and Debt Management

Credit: Your reputation for paying back money you borrow (good credit, bad credit).
Credit score: A numerical representation of your creditworthiness, used by lenders to determine loan approval and interest rates.
Interest rate: The percentage of the loan amount you pay for borrowing the money.
Loan: A specific amount of money borrowed with a set repayment schedule and interest rate.
Debt: The money you owe to someone else after borrowing.
Credit card: A card that allows you to borrow money for purchases, with monthly payments required.
Minimum payment: The smallest amount you must pay on your credit card each month to avoid late fees.
Compound interest: Interest earned on both the original amount you borrowed and the accumulated interest, increasing your debt faster.
Financial responsibility: Understanding how to manage your money effectively and use it wisely.
Credit
Credit Score
Interest Rate
Loan
Debt
Credit Card
Minimum Payment
Compound Interest
Financial Responsibility
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Building and managing credit is like navigating a thrilling financial obstacle course – challenging, but crucial for reaching your goals! Here’s why:

Future Friend

Good credit, earned through responsible borrowing and repayment, is like a glowing recommendation letter for your financial life. It unlocks doors to bigger possibilities, like mortgages, car loans, or even starting your own business.

Goal Getter

Need a loan for your dream education or business venture? Solid credit can grant you access to better options and interest rates, boosting your chances of reaching your milestones faster.

Responsibility Champion

Managing debt wisely, like training for the obstacle course, teaches valuable lessons about budgeting, delayed gratification, and financial discipline. It empowers you to make informed choices and control your financial future.

Debt Dragon Tamer 

Keeping debt under control is like mastering the balance beam – avoid taking on too much to prevent getting stuck. Prioritize needs over wants, track your spending, and stick to your repayment plans to slay the debt dragon before it gets too big.

Learning Lifeline

Building credit and managing debt isn’t about perfection – it’s a continuous learning process. Every obstacle overcome strengthens your financial skills and sets you up for success in the long run.

Wrap Up!

Remember, credit is a powerful tool, but like any tool, it requires awareness and caution. By building it responsibly, staying debt-free when possible, and navigating challenges with knowledge, you’ll turn the financial obstacle course into an empowering journey towards a brighter future!