2. Financial Service Providers SELECT YOUR OWN FINANCIAL SERVICE PROVIDER 1 ©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers

3. Preview Today we will answer these questions: Where can I cash my paycheck? What is the difference between a bank, credit union, and check cashing business? What do I need to know about using banking services? How do I decide where to do my banking? Use what you learn today to select a financial service provider. 2 ©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers

4. What’s the Difference? BankCredit Union Check-Cashing Business Grocery StorePawnshop 3 ©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers

5. Teach Your Peers Describe the financial service business – Share description in one or two sentences – Reference at least one local example List typical consumer finance services Explain how consumers use the services – Explain in 30-60 seconds – Give examples of how teens use services 4 ©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers

6. Read the Fine Print Do you think the fees and fee conditions are reasonable? Be prepared to share your findings with the class. 5 ©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers

7. Payday Loan Customer leaves post-dated check with lender – Fill out application – Leave a check to cover principal (amount borrowed) and fee – Must be employed and must have bank account – Must be at least 18 years old Customer receives borrowed amount Customer decides options by due date: – Instruct lender to deposit post-dated check – Pay cash and reclaim post-dated check – Renew loan Customer pays fees – High interest – Additional fees for “bounced” check 6 ©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers

8. Payday Loan … Good Choice? What are other options rather than using payday loans? 7 PrincipalTimeInterestAPRTotal Owed $500 (rent)2 weeks15% $300 (car loan)4 weeks12% $1,000 (household and credit card bills) 2 weeks10% PrincipalTimeInterestAPRTotal Owed $500 (rent) 2 weeks15%390%$575 $300 (car loan) 4 weeks12%156%$336 $1,000 (household and credit card bills) 2 weeks10%260%$1,100 ©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers

9. Services That Matter Life Style In-person or ATM deposits and withdrawals Online or mobile banking Convenient hours Convenient location Number of branch locations Other services (overdraft, automatic savings programs, alerts/reminders, etc.) Fees and User Requirements Minimum opening deposit Required monthly balance Overdraft fees ATM fees Penalties and withdrawal limitations Monthly maintenance fee Interest rates 8 ©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers

10. Challenge 5-B: Which is Best for Me? Use the DECIDE steps to select a financial institution with services that are right for you. 9 ©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers

11. Reflection Where do you keep your money now and why? Is it safe? Is it growing? Can you track it? 10 ©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers