Current Events: What's New With Overdraft Fees?
As readers of the blog know, overdraft fees are big profit generators for the big banks. Tens of billions of dollars big. So, what's new? The CFPB sees these large fees (average of $34 per overdraft) and wonders whether consumers really understand what they are signing up for when they opt-in to overdraft protection. This current event is a good opportunity to blend a discussion about policy while helping your students better understand a checking account "gotcha."
Let's start at the beginning....
Question of the Day: Why Can't We Give Up Writing Checks?
By Tim Ranzetta
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Aug 08, 2017
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Checking Accounts, Current Events, Question of the Day, Payment Types
For those educators out there still teaching students how to write checks, you have been vindicated!
From Bloomberg:
In an era of smartphones, online banking, and Venmo transfers, the U.S. still can’t seem to wean itself off paper checks. In most countries, they’ve gone the way of the fax machine and the rotary telephone. But their demise isn’t coming to America any time soon.
Americans still reach for their checkbooks more than anybody else. In 2015, they each made 38...
Article: How Is Venmo Changing The Nature of Friendships?
Hat tip to Jessica for this fascinating article about how the payment app Venmo is affecting friendships. Watch your students squirm as they discuss how they use Venmo with their friends.
From NY Times:
Margaret Pennoyer, an elementary school teacher in Manhattan, had just returned from a bachelorette party in Napa Valley when she received an email that had been sent to all the guests. The two organizers had itemized each woman’s individual expenses, which they had covered, and requested...
Another Step Towards A Cashless Society...
VISA providing incentives to small business owners to NOT accept cash. From Denver Post:
For years, mom-and-pop shops and food trucks alike have shuddered at the expense of credit card transactions. It’s not uncommon, for example, for small businesses to have minimum dollar amounts for card purchases. Some still don’t accept them at all or gently inform customers they prefer cash.
Credit-card behemoth Visa launched a campaign to change that Wednesday. The campaign to go cashless — or the...
What is Bitcoin and How Does Cryptocurrency Work? (A Primer)
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Jun 01, 2017
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Current Events, Identity Theft, Investing, Financial Literacy, Payment Types, Article, Math, Cryptocurrencies, Economics
Recently, Bitcoin, the most famous of the cryptocurrencies, has soared to all-time highs (Fortune, May 2017), increasing the amount of press attention and internet searches (Google Trends, May 2017) surrounding the little-known digital currency. We’ve also heard this question from many of our users, “what is Bitcoin and what do my students need to know about cryptocurrencies”? You are not alone! 83% of respondents in a 2015 survey conducted by PwC were “slightly...
NGPF Podcast: Tim Talks To Teacher-Innovator Tara Kelley of Harwood Union HS (Vermont)
By Tim Ranzetta
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May 30, 2017
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Credit Cards, Featured Teachers, Math, Teaching Strategies, Payment Types, Podcasts
I had a great conversation recently with NGPF Teacher Innovator Award winner, Tara Kelley, a math teacher from Harwood Union High School in Duxbury, Vermont. Tara created a Spring Break Project (who doesn’t want to plan a spring break vacation?) which allowed her students to explore the cost of using a credit card to pay for their Spring Break vacation. They learned through this activity the impact that changing their monthly credit card payments has on the total...
What Is the Most Common Form of Non-Cash Payments?
Answer: Debit cards (by a long shot)
From Federal Reserve (hat tip to Big Picture Blog):
_______
On the subject of debit cards, check out the NGPF Lesson: Pick A Payment Method where your students will learn the various pros/cons of different payment methods.
...
Chart of the Week: What Are Your Two Favorite Platforms for Watching "Television?"
By Tim Ranzetta
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Apr 19, 2017
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Budgeting, Research, Payment Types, Purchase Decisions, Current Events, Chart of the Week
The answer to this question has budgetary implications given how the cost differential between the platforms. If you are a millennial, your top four platforms, based on a recent survey, are:
Netflix
Cable TV
Hulu
Amazon Prime
Hat tip to VisualCapitalist for this infographic:
Questions for your students:
What are your two favorite platforms to watch television? How about your parents/guardians?
What are top rated platforms for millennials? for non-millennials? How do they differ?...
What Are We Watching? Three Of Our Latest Curated Videos
By Tim Ranzetta
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Apr 18, 2017
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Checking Accounts, Research, Credit Cards, Savings, Debit Cards, Payment Types, Teaching Strategies
The NGPF Team is always scouring the web for videos to add to our Video Library. Here are the latest that the team has uncovered:
Pay Day 101: Direct Deposit (from Young Illinois Saves), duration of 3:48, provides a good description of how direct deposit works from the perspective of young adults:
Questions:
In your own words, what is Direct Deposit?
How can you set up Direct Deposit?
Is Direct Deposit safe?
What are the benefits?
Which of the benefits of Direct Deposit means the most to you?
...
What Percentage of IPhone Users Have Tried Apple Pay?
By Tim Ranzetta
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Apr 05, 2017
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Payment Types, Behavioral Finance, Question of the Day, Research, Current Events
Answer (from WSJ): 13%
Back in 2014 (eons ago in the tech industry), we marked the launch of Apple Pay with a post that included several news summaries and the potential that Apple saw in the product. We had students analyze the stories and then answer that personal question “Would you use Apple Pay?” Apparently the answer for most IPhone users two years later is a resounding “No.”
Jessica also wrote a post in early 2015 asking the question “Can Teenagers Use...
Resource Lists for Financial Educators (courtesy of Barbara O'Neill of Rutgers Cooperative Extension)
By Tim Ranzetta
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Mar 28, 2017
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Activities, Credit Scores, Career, Paying for College, Research, Budgeting, Credit Cards, Identity Theft, Personal Finance, Investing, Mutual Funds, Savings, WebQuest, Financial Literacy, Student Loans, Checking Accounts, Debit Cards, Payment Types, Stocks, Current Events, Insurance, Video Resource, Case Study, Credit Reports, Employment, Quizzes, Entrepreneurship
What does a distinguished professor do during her sabbatical? Curate personal finance resources, of course! In this blog post, Barbara O’Neill shares the fruits of her hundreds of hours of labor in putting together three awesome resource lists (see bottom of post for links to her lists), including what what she considered the “best of the best” from the NGPF library. As she describes below, the purpose of her odyssey was to replenish her “well” of creative...
Chart: How Do Credit Card Companies Make Money?
By Tim Ranzetta
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Feb 08, 2017
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Question of the Day, Research, Credit Cards, Payment Types, Current Events
Students need to understand the business models behind credit card companies as well as other financial service companies. Why? It provides a roadmap for consumers as to how they should use the financial product to AVOID becoming a profitable part of that business model. NerdWallet has a report out about credit card trends, which included this chart showing how credit card companies make money:
Here are the definitions that help to explain the terms in the chart:
Credit card revenue comes...
Charts: What Are The Most Common Non-Cash Forms of Payment?
By Tim Ranzetta
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Jan 08, 2017
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Payment Types, Question of the Day, Research, Current Events, Chart of the Week
You might ask your students to rank order the following non-cash payment types from most common to least common and see how they do:
Credit cards
Checks
Prepaid debit cards (often called prepaid cards)
Debit cards (what comes with your checking account)
ACH (automated clearinghouse payments – see definition below)
_________
The Federal Reserve is out with their triennial report on non-cash payment trends and there are some fascinating charts within it (look for more over the coming...
Question: How Much Are The "Big 5" Credit Card Companies Spending on Rewards Programs?
By Tim Ranzetta
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Jan 04, 2017
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Credit Cards, Behavioral Finance, Question of the Day, Research, Payment Types, Current Events, Chart of the Week
From Financial Times (sub. required):
Answer: A LOT! Almost $23 BILLION in 2016 based on estimates from Instinet
These reward programs provide cash back or points (that can be exchanged for goods or services) to cardholders based on their spending habits. The FT article answers a few questions that students might have:
Who wins with these rich credit card reward programs?
In a word, consumers! “It is an amazing time to be a consumer,” says Mr Kelly. “Sign-up bonuses of 100,000 points on...
Question: How Much Do Banks Earn From Overdraft Charges?
By Tim Ranzetta
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Jan 02, 2017
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Activity, Question of the Day, Budgeting, Checking Accounts, Debit Cards, Payment Types, Current Events, Chart of the Week, Article
Answer: Billions!
Happy New Year! Welcome back to school. I know that banking tends to be a unit that many of you teach early in the semester so this data should prove particularly timely. I have posted on this topic several times but have some new data to report about the three largest U.S. banks and their fees from overdraft charges (from Financial Times, subscription required):
This quarterly data on the three largest banks shows how fees tend to grow over the course of the year as evidenced...
