Consumer credit unit overview | Teacher Resources | Financial Literacy | Khan Academy

Hi teachers,

Welcome to the unit on consumer credit. So, just as a high level, this is going to cover everything from credit scores—what is it? How it's able to give people who might give someone credit a sense of how likely you are to pay back that credit—and that's all explained in the videos and the articles there.

Then we obviously have the exercise there to help students understand that further. Then we go into credit cards, which is a big part of many folks' lives, and so it's very important that students get a good understanding of it.

Then we start thinking about different ways that you could pay: you could pay with cash, you could pay with credit, you could pay with other things. Of course, each of these lessons has their own exercise, and then we have a unit test at the end.

As a teacher for this, I recommend, first of all, trying to go through it yourself. It won't take you too long, as you can see there's only three exercises in a unit test here. Then, if you have the time, I encourage you to watch the videos and read the articles as well as you can.

But if you have very little time, take the unit test, see what you feel confident in, see what you don't, and then review the parts of the lessons that you might want to brush up on. Now, these are things that all of us adults deal with in our everyday life.

So as much as possible, without giving students too much personal information, I think it really is valuable to tell students ways that these ideas, like payment methods, credit cards, and credit scores, have affected your life. Because at the end of the day, we at KH Academy can create these videos and these exercises, but I think it really sticks with students when they see adults like yourself saying, “Hey, look, you know, I first didn't realize that a credit score was like this,” or “my cousin had this issue with the credit score because they made this mistake, and because of this, they had trouble doing X, Y, or Z.”

Or when you're in your teens or you're in your 20s, you don't realize the importance of some of these things, but one day you’re going to go get a car loan, you're going to get a house loan, and then all of a sudden you're going to wish that when you were in your teens or your 20s, you might have made different decisions.

The other thing I would recommend—and I would recommend this with all of the units in this financial literacy course—is give the students questions to ask their own parents. One, their parents are going to be able to have a lot of stories about this and give some wisdom, but also now that the students are able to learn this at a level of depth that, frankly, most adults don't get, they actually might be able to help their parents also understand things like a credit score.

I think most folks don't realize who are the credit agencies, where do they come from, how are they connected, and what actually drives this credit score. I think folks have a general sense of what credit cards are, but they don't know exactly how they work or how high that interest could be, or how you could use them wisely to your advantage.

And how even payment methods have a psychological or even a real financial implication to them. So encourage you to go through this yourself, get mastery in it, work your students through it, and then as many real-life scenarios from both yourself and the students' families, the better.