Credit and You – You are in “Charge!”

Some dreams have a price tag attached to them. Sometimes the only way you can pay for those dreams is to borrow money. Do you have a dream that's bigger than your bank account? Would you take out a loan to fulfill it? Before you decide, you need to look closely at what that dream is and see what the opportunity cost is to achieve it.

In this activity, you'll look at your big dreams that are going to cost big money and see whether it's worth borrowing money now, or if you should wait until you have some or all of the money saved up.

1. Open the Credit file and fill it out.
2. Start by listing your big dreams like a car, college tuition, or a house and selecting one that you'd most like to have to buy on credit.
3. Figure out approximately how much the item is going to cost and how much you'd need to borrow.
4. Estimate how long it would take you to pay off the money you borrow at 6% APR and determine how much the total cost of the credit would be.
5. Talk to friends and family members to find out if they think it's worth borrowing money to buy the item.
6. Develop a list of pros and cons related to borrowing money for this item and then decide whether you should do it. If you do, what would be the best way to finance it. Your ability to repay the loan should influence your decision.
7. Submit your completed document to the dropbox.