Application
This unit describes the skills and knowledge required to understand the functions and implications of different forms of credit, and the strategies and methods to make appropriate and effective decisions regarding management of personal debt and use of credit facilities. It has wide application and may be used in workplaces, schools, adult and community learning organisations or registered training organisations to build the financial literacy of learners. The unit may also be used as part of pre-vocational or new apprenticeship programs, or as part of services provided by counselling or advisory organisations.
It applies to individuals who explore new ideas and techniques to build personal financial literacy knowledge.
No licensing, legislative or certification requirements apply to this unit at the time of publication.
Elements and Performance Criteria
ELEMENT | PERFORMANCE CRITERIA |
Elements describe the essential outcomes. | Performance criteria describe the performance needed to demonstrate achievement of the element. |
1. Identify and discuss role of credit in society | 1.1 Identify and discuss concepts and terminology of credit provided by financial institute and debt incurred by borrower 1.2 Identify historical and current role of consumer credit in Australian society and discuss advantages and disadvantages of credit use 1.3 Discuss impact of consumer debt on national economy |
2. Identify and discuss range of credit options available | 2.1 Identify and compare types of credit facilities used by businesses 2.2 Identify and compare types of credit facilities used by individuals 2.3 Identify and discuss differences between unsecured and secured loans 2.4 Explain implications of default on secured loans to borrower |
3. Identify and compare costs of using credit | 3.1 Compare fees and costs associated with different types of credit options 3.2 Compare features and associated risks of fixed versus variable interest rates 3.3 Identify ways to compare advertised interest rates and effects of fees and charges |
4. Identify and discuss effective use of consumer credit | 4.1 Identify and discuss ways to avoid excessive or unmanageable debt 4.2 List strategies to minimise fees on credit 4.3 Discuss importance of meeting minimum payments on credit cards 4.4 Identify and discuss ways to avoid credit card fraud |
5. Explain personal credit rating and history | 5.1 Describe role of credit reference agencies 5.2 Explain purpose and use of credit reference reports in assessing loan applications 5.3 Identify and discuss implications of establishing a poor credit history 5.4 Describe methods of obtaining own credit reference report and discuss right to access the report |
Foundation Skills
This section describes language, literacy, numeracy and employment skills incorporated in the performance criteria that are required for competent performance.
Skill | Performance Criteria | Description |
Reading | 1.1-1.3, 2.1-2.4, 3.1-3.3, 4.1-4.4, 5.1-5.4 | Researches, interprets and compares written information from a range of sources to identify key details relevant to the enquiry |
Writing | 1.1-1.3, 2.1-2.4, 3.1-3.3, 4.1-4.4, 5.1-5.4 | Documents information accurately using correct spelling, grammar and terminology Describes concepts accurately and in a format appropriate for the audience and purpose |
Oral Communication | 1.1-1.3, 2.1-2.4, 3.1-3.3, 4.1-4.4, 5.1-5.4 | Participates in verbal exchanges using active listening and questioning to elicit information and develop a clear understanding |
Numeracy | 3.1-3.3, 4.2, 4.3 | Performs a range of mathematical calculations to interpret the impact of varying rates and charges and to compare financial information |
Navigate the world of work | 1.1-1.3, 2.1-2.4, 3.1-3.3, 4.1-4.4, 5.1-5.4 | Identifies, confirms and understands regulatory requirements Maintains up-to-date knowledge of debt and consumer credit required for own situation |
Get the work done | 2.2, 2.2, 3.1-3.3 | Uses digital systems and tools to conduct research and complete tasks |
Sectors
Financial literacy