What S the Best Way to Pay?

Grade: 8 Lesson #6

What’s the Best Way to Pay?

SS.8.FL.2.3. Describe the variety of payment methods people can use in order to buy goods and services.

Correlated Literacy Standards

LAFS.8.RI.3.9 Analyze a case in which two or more texts provide conflicting information on the same topic and identify where the texts disagree on matters of fact or interpretation.

LAFS.68.RST.1.2 Determine the central ideas or conclusions of a text; provide an accurate summary of the text distinct from prior knowledge or opinions.

SS.8.FL.2.3. Describe the variety of payment methods people can use in order to buy goods and services.

What’s The Best Way to Pay?

Lesson Number#: 6

Correlated Florida Standards (See Full Text on Cover Page)

· LAFS.8.RI.3.9

· LAFS.68.RST.1.2

Essential Question

· What are different ways to pay for goods or services?

· What are the advantages and disadvantages of the different payment methods?

· How does each payment method differ?

Learning Goals/Objectives

· Identify different payment methods for goods and services

· Compare and contrast various payment methods.

· Explain the advantages and disadvantages of using various payment methods

Overview

This lesson introduces students to different methods of payment for goods and services. Students will explore, compare and describe the costs and benefits of each payment method.

Materials

· Computer with internet access

· Promethean or SmartBoard

· Video: History of Money https://www.youtube.com/watch?v=wWW5JvOdXsI (5:22)

· Handout #1 Methods of Payment (included in lesson)

· Handout #1 Methods of Payment Answer key (included in lesson)

· Video: Choosing the Right Card (Credit, Debit, Pre-paid ) 3:07 https://www.youtube.com/watch?v=7eOlKk4oEl8

· Handout # 2 Comparing Methods of Payment (included in lesson)

· Handout # 2 Comparing Methods of Payment Answer Key (included in lesson)

Time

· 50 minutes

Activity Sequence

INTRODUCTION/HOOK (6 minutes)

Ask students to explain the meaning of money. Discuss answers and tell students that we have not always had money. Explain that in the earliest times people took care of all of their own wants and needs. They hunted and gathered, made their own clothing and shelter. As labor became more specialized, people began to barter. Tell class that before we begin today’s lesson on different methods of payment, we are going to watch a video on The History of Money. Show video: https://www.youtube.com/watch?v=wWW5JvOdXsI

ACTIVITY (39 minutes)

1. Review video and recap the history of money. Tell students that now we are going to think about how we pay for goods and services in 2016. ( 2 minutes)

2. Ask students, “What is your favorite place to shop?” Discuss answers, then ask “How do you usually pay for your purchases? How do your parents pay?” Have students identify different ways people pay for goods and services. List their answers on the board.

· Possible responses: cash, credit card, debit card, check, gift/prepaid card, money order, cashier’s check

· From the list, take a quick survey of how many students use the different methods. Rank the results and ask students why they think the payment method with the most votes was selected. (4 minutes)

3. Tell students that in today’s lesson they are going to be exploring five of the most common Methods of payment: Cash, Credit Card, Debit Card, Personal Check, and Prepaid (or gift) Card. ( 1 minute)

4. Divide students into groups. Distribute Handout # 1 “Methods of Payment” Explain to students that they are to discuss the 5 payment methods listed on the handout with their group. They should then describe the characteristics of each method of payment and explain how it is used. (2 minutes)

5. Provide time for students to work in groups. (Depending on your students, you may choose to allow them to use tablets to complete this assignment). (10 minutes)

6. Review and discuss answers. (3 minutes)

7. Explain that because they look similar, credit, debit and prepaid debit cards are sometimes confused. Tell students that they will be viewing a video comparing and contrasting the three types of cards. They will need the information presented in the video (especially the advantages and disadvantages of the three types of cards) later in the lesson. Therefore, have students take notes on the aforementioned areas. They may take their notes on the back of Handout # 1. Show the video: Choosing the Right Card (Credit, Debit, Pre-paid ) https://www.youtube.com/watch?v=7eOlKk4oEl8 (5 minutes)

8. Discuss video with emphasis on the differences among the three types of payment methods. (2 minutes)

9. Distribute Handout # 2. Explain to students that they are to work independently for the first 4 minutes to complete Handout #2. They will then have 4 minutes to discuss their answers within their group and rank order their preferred payment methods. The group should reach a consensus on their rank order. (8 minutes)

10. Bring the class together and have groups share their rank orders of payment methods and explain the reasoning for their rankings. (2 minutes)

CLOSURE (5 minutes)

Compare students’ rank order from the last activity to the list on the board from the beginning of class. Ask students if their opinions on payment methods have changed after today’s lesson. Revisit and have students answer the lesson’s essential questions. Wrap up the lesson by posing/discussing the question presented at the end of the History of Money video: Do you think that the other payment methods we discussed today will completely replace currency as the exchange medium for goods and services?

OPTIONAL EXTENSION SUGGESTION/HOME LEARNING

As an extension or home learning assignment, students can create a list of different items that they would use to pay for with cash, items with a credit card, items with a debit card, and items with a prepaid/gift card. Students should also provide an explanation as to why they chose their response (i.e. If using a vending machine, cash would be best because most vending machines do not accept other forms of payment and vending machine items are typically low in price).

Sources/Bibliographic Information that contributed to this lesson

www.kansascityfed.org/education

https://www.kansascityfed.org/publicat/education/teachingresources/Payment%20Parliament.pdf

History of Money https://www.youtube.com/watch?v=wWW5JvOdXsI

Choosing the Right Card (Credit, Debit, Pre-paid ) 3:07 https://www.youtube.com/watch?v=7eOlKk4oEl8

Name:______Period:______Date:______

Handout # 1 In the space provided, explain each method of payment. Describe its characteristics and explain how it is used.

Methods of Payment
Cash
Credit Card
Debit Card/ATM Card
Personal Check
Prepaid Card/Gift Card

Name:______Period:______Date:______

Handout # 1- Answer Key In the space provided, explain each method of payment. Describe its characteristics and explain how it is used. (Answers will vary)

Methods of Payment
Cash
/ Cashrefers tomoney in the form ofcurrency- in our country, dollars and coins.
Cash is easy to use when paying for purchases. Cash can be exchanged for goods and services. Almost all businesses accept cash. It is good for small purchases, but not too convenient for large purchases such as a house or car.
Different countries use different currencies. Your local currency may not be accepted in other countries. You cannot make online purchases with cash.
Credit Card
/ A credit card is a small plastic card measuring approximately 3.370in × 2.125in. It has either a magnetic strip on the back or chip that can be read by a company’s card reader. The card has the owner’s name, account number and expiration date on the front and signature panel on the back.
Credit cards are issued by banks or financial lenders. When you use a credit card, you are making a loan from the lender. You will receive a bill (statement) at the end of each month. There are fees and interest charges for using a credit card.
Most businesses accept credit cards. They can be used for online purchases.
Debit Card/ATM Card
/ Adebit card(can also be used as an ATM card) is asmall plastic card that provides the user electronic access to theirbank account. When used, a debit card sends a message to the user’s bank to withdraw money from their account to pay the retailer. The card is used like cash to purchase goods and services, both in stores and online. At an ATM, you may withdraw cash.
When you use a Debit card, you enter your PIN (Personal Identification Number) for added security. Most companies accept debit cards. If you do not have enough money in you account to cover your purchase, it will be declined.
Personal Check
/ Acheck is a document that orders a bank to pay a specific amount of money from a person's account to the person whose name is on the check. When you write a check you list the person’s name, the amount and date of the check. Checks were developed to avoid carrying large amounts of money.
Most businesses accept checks, although some do not. You must have enough money in your account to pay the check. If not the check will be returned noted as “insufficient funds” and you will be charged a fee.
Prepaid Card/Gift Card / A prepaid (or gift card) is what is known as a stored-value card. The money is paid in advance. If you have a $100 dollar pre-paid card, you may use it to purchase $100. After that, the card has no additional funds. The pre-paid cards look like credit/debit cards, but do not have your name on them. Often there is an up-front fee to purchase the card (in addition to the card funding). If you card is lost or stolen, there is little chance of getting it back with no name or PIN number anyone can use it.

Name:______Period:______Date:______

Handout # 2 Comparing Methods of Payment

Directions: Complete the chart based on your knowledge and opinion of the following payment methods: cash, credit/debit card, and prepaid/gift card. Then, decide as a group your preferred payment method by ranking them 1-5 (with 1 being the most favored, 5 being the least favored). Be prepared to explain your rankings to the class.

Payment form / Benefits of Using (Provide 2 Reasons) / Drawbacks of Using (Provide 2 Reasons) / Preferred payment ranking(1 most favored – 5 least favored)
Cash
Credit Card
Debit Card
Prepaid Card
Personal Check

Name:______Period:______Date:______

Handout # 2 Comparing Methods of Payment Answers

Directions: Complete the chart based off your knowledge and opinion of the following payment methods: cash, credit/debit card, and prepaid/gift card.

(Answers may vary)

Payment form / Benefits of Using (Provide 2 Reasons) / Drawbacks of Using (Provide 2 Reasons) / Preferred payment ranking(1 most favored – 4 least favored)
Cash / · Convenient-easy to use
· Easy to carry
· Accepted by most businesses
· No fees
· No interest
· Helps you stay on budget (you can’t spend what you don’t have) / · Risk loss or theft
· Not good for major purchases
· Some currency not accepted in different countries
· Can’t use for online purchases
· No record of your purchases other than store receipt
Credit Card / · Convenient-easy to use
· Easy to carry
· Accepted by most businesses
· Good for larger purchases
· Good for emergencies
· Good for building a credit history
· You have a record of purchases / · May have fees to use
· Interest charges (if not paid in full each month
· Some people charge more than they can afford
· Penalties for late payments
· Vulnerable to credit card fraud
Debit Card / · Convenient-easy to use
· Accepted by most businesses
· You have a record of purchases
· Can receive cash at ATMs
· PIN adds extra security / · Some banks may have fees
· Some ATMs charge a withdrawal fee
· You cannot buy more than the money in your account (will be declined)
Prepaid Card / · Convenient-easy to use
· Easy to carry
· Accepted by most businesses
· Paid in advance / · May have fees to purchase
· Risk of loss or theft
· No record of your purchases other than store receipt
· May have small amount of $ left that is difficult to use
Personal Check / · Accepted by most businesses
· You have a record of purchases
· Can be written for large amounts
· Your check is your receipt / · Less convenient to carry (checkbook)
· May need additional identification to use
· Must have sufficient money in your account to pay the check
· May have “insufficient funds” fee if not enough $ in account