An in investm tment t in in know owledge ge always pays the - - PowerPoint PPT Presentation

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“An in investm tment t in in know

• wledge

ge always pays the the best t in inte terest.” .”

Assess the impact of using high cost, non-depository financial service providers such as

– Check Cashing Services – Payday Lenders – Rent-to-own – Pawnshops

Why does this maEer to our students?

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Are you beEer off cashing your paycheck at the bank or the check cashing service? Are you beEer off cashing your paycheck at the bank or the check cashing service?

hEps://www.youtube.com/watch?v=ApFXYZqE004

Check it Out! - Get Smart About Money

hEps://www.youtube.com/watch?v=ApFXYZqE004

2/12/16 3 So how can you get a payday loan in Pennsylvania? …in our state although payday lending loans are NOT legal, payday lenders have managed to conduct business anyway.

LO

LOANS

Certain demographics are more likely to use payday loans than others – e.g. the odds of using a payday loan are:

• 57% higher for renters than for homeowners
• 62% higher for people earning less than $40,000

than for those earning more

• 82% higher for people without a college degree

than for those with a four-year degree or higher

• 105% higher for blacks than for other races/ethnici_es

Source: Pew Charitable Trust

hEp://www.npr.org/2015/03/26/395421117/payday-loans-and-endless- cycles-of-debt-targeted-by-federal-watchdog

PAYDAY LOANS NS

…and endless cycles of debt

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LOANS NS

hEp://www.consumer.ac.gov/media/video-0078-payday-lending

hEp://www.econedlink.org/teacher-lesson/1211/ hEp://www.econedlink.org/teacher-lesson/1211/

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Lis List Price ice vs Rent ent-t

• to-o
• -own

n Price? ice?

hEps://www.youtube.com/watch?v=ObzdrjhEk-M hEps://www.youtube.com/watch?v=ObzdrjhEk-M

Lis List Price ice vs Rent ent-t

• to-o
• -own

n Price? ice?

Easyhome: The high costs of rent-to-own (CBC Marketplace) hEps://www.youtube.com/watch?v=ObzdrjhEk-M

O n l y $ 2 9 / w e e k f

• r

1 5 6 w e e k s

Easyhome: The high costs of rent-to-own (CBC Marketplace)

$ 4 , 5 2 4 ! !

hEps://www.wisc-online.com/learn/formal-science/mathema_cs/abm3702/ what-i-want-nowthe-hidden-costs-ofrent-to-own Does not play

• n the iPad –

requires

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• They look the same but work differently.
• Which one helps you build credit ?
• Which one helps you avoid overspending?

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Student Assignment Research the costs

• f acquiring a

Rent-to-Own item currently adver_sed like an iPad versus purchasing it

• n Amazon.com.

Graph your results. Student Assignment Compare and contrast the buyer’s alterna_ves e.g.

• How many weeks to

save enough money to pay List Price versus acquire at RTO Price?

• An independent, nonprofit organiza_on serves consumers

through unbiased product tes_ng and ra_ngs, research, journalism, public educa_on, and advocacy.

• “We stand firmly behind the principle that consumer

products and services must be safe, effec_ve, reliable, and fairly priced. “

• “We insist that manufacturers, retailers, government

agencies, and others be clear and honest.”

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Invite your students to create an adver_sement showing how RENT-TO-OWN can some_mes mean

RENT-TO-OWE.

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hEp://money.howstuffworks.com/pawnshop.htm

…and all the fees paid to get it back!

“If an item is priced at $100 new, and the pawnbroker thinks it will sell for $60 used, then the loan amount would be $20. “ “The pawn Kcket for this item would ask for $24.40 (2 % interest plus 20 % in other fees) in 30 days.”

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