In the previous section, this course presented a scenario about how the use of credit cards can improve your life or weaken your ability to achieve your goals:

Your secured credit card helped you start building your credit history. It raised your credit score so you could get an unsecured credit card and you watched your balance carefully, making sure you always stayed under your credit limit.

Your prudent use of your unsecured credit card and your increasing credit score earned you cards with no annual fees and 0% annual percentage rates (APRs).

In time, each card had a $5000 credit limit. With your excellent credit report, you had no problem securing two vehicle loans and a mortgage. You bought nice things and travelled a lot.

Then, for good reason, you could not pay your minimum payments on time. You started charging daily living expenses and went over your credit limit. Finance charges were being charged on finance charges and your minimum payment, already unpayable, rose.

Your interest rates rose and ultimately you went into universal default. Debt collectors began to call. You considered credit-repair offers to erase or change your credit history or give you a new credit identity, but they all looked like scams to you. You began to consider bankruptcy, but feared what it would mean to your life, now and in the future.

In the next activity, you will find out how much you learned from these experiences and consider if you will do it again someday. For real.