Credit, debt and risk
Borrowing is not automatically bad. Borrowing without understanding the cost usually is.
Part of your national curriculum
- Financial capability: Understand credit, debt, insurance and the risks attached to different financial products
Lesson overview
What you'll learn in this lesson
Understand credit, debt, insurance and the risks attached to different financial products
Key learning points
- • What credit costs
- • Kinds of borrowing
- • Insurance and risk
This lesson at a glance
- 25 minutes
- 17 parts to scroll through
- 3 quick checks
- Marked quiz at the end
- Gentle pace: short sittings with pauses
Words to know
Scroll down — the lesson carries on below
Watch & discover
Part 1 of 17
Visual introductionPicture this
Credit, debt and risk
Borrowing is not automatically bad. Borrowing without understanding the cost usually is.
In a nutshell
Understand credit, debt, insurance and the risks attached to different financial products
Learning cycle
Part 2 of 17
Learning cycle 1 of 2
Part 1 · What credit costs
A short piece of teaching, then a check to make sure it has landed.
Explore the idea
Part 3 of 17
Learn
What credit costs
Interest is the price of using someone else's money, shown as an APR. A £500 balance at 30% APR left unpaid for a year costs about £150 extra.
Reset break
Part 4 of 17
Pause
That's sitting 1 of 4 done
Stretch, get a drink, look out of the window. There is no timer and nothing is counting down — your place is saved, so you can come back in five minutes or tomorrow.
Explore the idea
Part 5 of 17
Learn
Kinds of borrowing
A mortgage is secured against a house at low interest. Credit cards, overdrafts and buy-now-pay-later are unsecured and much more expensive if not cleared quickly.
Quick check
Part 6 of 17
Quick check
Part 7 of 17
Reset break
Part 8 of 17
Pause
That's sitting 2 of 4 done
Stretch, get a drink, look out of the window. There is no timer and nothing is counting down — your place is saved, so you can come back in five minutes or tomorrow.
Learning cycle
Part 9 of 17
Learning cycle 2 of 2
Part 2 · Insurance and risk
A short piece of teaching, then a check to make sure it has landed.
Explore the idea
Part 10 of 17
Learn
Insurance and risk
Insurance swaps a small certain cost for protection against a large unlikely one. It is worth it where the loss would be unaffordable, and often not worth it for small items.
Quick check
Part 11 of 17
Reset break
Part 12 of 17
Pause
That's sitting 3 of 4 done
Stretch, get a drink, look out of the window. There is no timer and nothing is counting down — your place is saved, so you can come back in five minutes or tomorrow.
Challenge round
Part 13 of 17
Game · Sort it
Which of these are true?
Drag each card into the right column. Tap a card first if dragging is fiddly.
True
Not true
Challenge round
Part 14 of 17
Game · Fill the gaps
Finish the sentences
Choose the word that belongs in each gap.
____ cards, overdrafts and buy-now-pay-later are unsecured and much more expensive if not cleared quickly.
____ swaps a small certain cost for protection against a large unlikely one.
Challenge round
Part 15 of 17
Game · Recall cards
What does APR describe?
Card 1 of 3
Mastery quiz
Part 16 of 17
Marked quiz
End of lesson quiz: Credit, debt and risk
3 questions, marked with the reasoning shown. No timer.
1. What does APR describe?
2. Which is usually the cheapest borrowing?
3. When is insurance most worth buying?
Lesson round-up
Part 17 of 17
Lesson round-up
Ready when you are
Quiz score
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Points this lesson
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Luna: 0 out of 3 on the practice checks. Only if you feel up to it — one more?
Ask LunaPart 1 of 17 · Watch & discover
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Understand credit, debt, insurance and the risks attached to different financial products