Maths KS3 / GCSE: Understanding credit

Adina Campbell investigates loans and credit, a topical issue as more than two thirds of 18-24 year olds in the UK have some form of debt.

She meets Michelle who is looking to buy her first car, and they find out what finance options are available.

They discuss bank loans, credit cards and pay day loans, comparing their APRs and overall costs.

Explanations are given as to how each of these methods work and the dangers inherent in making the wrong decisions.

Financial expert Martin Lewis outlines the questions you should ask before taking on debt.

This clip is from the series Made of Money.

Teacher Notes

This clip could be used to help clarify key concepts related to debt and evaluate different sources of credit including calculating the true cost of purchasing with the added annual percentage rate.

Pupils could also construct a check list to identify 'bad debt' and share this with peers.

Curriculum Notes

Suitable for teaching Maths at KS3 and GCSE in England, Wales and Northern Ireland and National 4 and 5 in Scotland.