Making Money Matter - Information on Loans
Loans and Credit Cards scenario transcript
Georgie Palmer (GP): Banks are important, they keep our money safe, and they can help us save for the future. Having a bank account can make managing your money easier, and they can give you help and advice, so you pay the regular bills without having to worry, but they also offer credit cards and loans.
Banker (B): Hello
B: Would you like some money? Here have this with my compliments.
GP: Thank you very much.
B: Bye bye
GP: Well that’s never happened before. But credit card companies and banks often seem to be offering money just like that. I’m off to buy something.
(GP goes into clothes shop, comes out with a top)
(banker approaches GP)
B: Hello, you know that money I lent you earlier?
B: Well I’d like it back now please.
GP: Oh, I haven’t got it.
B: And I want £20 extra because I lent it to you in the first place.
GP: But I haven’t got the money or the extra.
B: Well that won’t do.
GP: I thought you were giving it to me.
B: Sorry it was just a loan, haven’t you read the small print?
GP: No I don’t know what to do.
B: Well what did you buy with my money?
GP: I bought this lovely top.
B: Mmm, well, that will have to do, good day.
GP: Oh dear, I don’t really think it’s his colour.
GP: A loan is when a company or bank lends you some money. You can use this money to buy things, and a credit card is nearly the same. Having one allows you to borrow money to buy things with a card but you have to remember you haven’t been given the money, you’ll have to pay it all back and some more as well to cover the cost of borrowing it, and that’s called interest. It’s really easy to borrow money to buy something, it’s really hard to save up to pay it back, and if you can’t pay it back the company or bank might demand that they keep the thing that you bought. If you want to buy something and you haven’t got the money ask the person who supports you for advice.