Even young students can gain a well-rounded understanding of credit, including its advantages and costs, with age-appropriate ways to tackle the topic in the classroom.

Getting Creative with Credit

Former public school educator and Kansas City Fed economic educator Michele Wulff recalls a conversation with fifth graders where she asked them to define credit.

“I heard wide-ranging definitions and several negative credit stories, such as how parents cut up cards in frustration over mounting bills and rising interest rates,” she said. “It taught me that we need to lay the foundation for responsible use of credit.”

Wulff suggests that even as a preschooler, children can learn the difference between wants and needs to establish good decision-making skills. From there, elementary students can build up with money skills that let them practice the basics. Another fun way to tackle the topic of credit in a basic way, Wulff said, is to utilize the Kansas City Fed’s interactive Financial Fable “Percy Peacock and the Credit Crisis” and associated lesson plan.

“The fable focuses on using credit wisely, including managing purchases and payments in an age-appropriate way,” she said.

The concept of money and credit start to really come alive for pre-teen and teenagers, and educators have their own creative ways to teach the concept. Anne Jardine, business skills teacher at Wamego Middle School, brings credit card offers she gets in the mail to class for students to compare interest rates, grace periods and credit limits.

“It really opens their eyes as to the differences in credit card options,” Jardine said.

Another good way to get students to understand credit is by applying it in a way that directly affects them.  Waverly (Neb.) High School Teacher Trent Goldsmith does this using grades. He asks his students what grade they want on a test; then he gives them their desired grades and charges them credit along with interest rates that they choose.

“They have to pay me back later with interest for a good grade today,” Goldsmith said.

Wulff points out that it is important to bring decision-making skills to the forefront when talking about credit, focusing on both its advantages and disadvantages.

“Credit cards can be safe and convenient and useful in financial emergencies,” she said. “But there are potential pitfalls of not using credit wisely – excessive debt and the effect of compounding interest. It’s important students learn and research their options, responsibilities and rights when it comes to credit.”

Classroom Resources on Credit

For more classroom-ready resources related to credit, consider:

Do you have creative ways you have taught about credit in your classroom? If so, share them with us via email, and we might use them in a future edition of our Teacher Talk Planner.

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