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Dunn To PerfectionFoundation

Financial Literacy · Module 1: Money Basics · Lesson 3

Debt & Interest

Beginner 6 minLesson 3 of 6

Learning objectives

  • Explain debt & interest in plain language
  • Understand why it matters to markets
  • Recognise a common misconception

The concept

Borrowing costs interest. High-interest debt (like credit cards at 20%+) grows fast.

Why it matters

Paying off high-interest debt is often a guaranteed 'return'.

How markets interpret it

Interest compounds against borrowers.

Key takeaways

  • Prioritise high-interest debt.

Knowledge check

Paying off a 22% credit card balance is like…

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