>> Production funding and educational outreach for Biz Kids is provided by Coalition of America's Credit Unions, where people are worth more than money.

A complete list of individual credit union funders is available at wxxi.org.

>> Every day, America's credit unions help members with their financial needs.

And with programs like Invest in America, it's only fitting that credit unions support Biz Kids, because financial education is what we do.

Learn more at lovemycreditunion.org.

>> A credit card with your very own name on it.

>> This.

>> It's a symbol of growing up, like keys to a car.

But before you can get those keys, you need to learn the rules of the road.

And when you're on the road, you need to follow those rules.

But getting a car offers so much freedom and mobility.

Credit can be helpful too.

But just like driving, you need to know the rules, and you need to keep your eye on it.

>> Biz, biz, biz, biz, biz... >> And if you can do that, you'll be a Biz Kid.

>> ♪ When making money is the aim ♪ These kids they bring their game ♪ They're the Biz Kids can you dig it ♪ They know what's up and let you know ♪ Just how to make that dough ♪ They're the Biz Kids right on ♪ So learn a little more about bringing money through the door ♪ They're the Biz Kids right on.

♪ >> High prices are not taking time off.

>> How do you pay for things?

>> Do you use this?

A lot of people use cash to pay for things, just ordinary money.

And you can usually buy anything anywhere with cash.

>> Or do you use this?

A lot of people use credit.

Most businesses accept credit cards these days.

>> So what's the difference?

When you use cash, that's that; you're all paid up.

>> Credit means the company that gave you this card is letting you borrow the money for that transaction, but you still have to pay the money back later.

>> And usually, when you're buying on credit, you have to pay interest, which is a percentage of the original price, and they keep on charging you until you pay up.

>> So really it's pay now with cash and be done, or use credit and pay more later.

Speaking of borrowing money, can I have back that $10 I loaned you last week?

>> The big city was cold-- so cold your breath would freeze and hit you in the face when you walked.

But she was going to be here any minute.

That would warm me up.

Darla Dollar-- she was the kind of dame that could make a hermit ditch his cave for a two bedroom in the 'burbs.

And I had to ask her a few questions.

Nice dress.

>> Saved up my somolians for weeks, then got it on sale.

>> She walked right into my trap.

That's what I've been meaning to ask you about.

Word on the street is you bought that dress with cash.

>> Yeah?

What's it to you?

>> I'd think you'd use a credit card.

>> They charge you interest, you know.

>> She definitely had my interest.

And she had a point.

>> If I'd bought this dress on credit and made minimal payments, then it could have taken me years to pay it off, and I would have ended up spending more than the actual dress cost.

>> This dame was smart.

So with cash, it just costs what it costs.

>> You got it.

Anything else you need me to explain to you?

>> She was hot enough to melt the coins in my pocket, if I'd had any.

>> Cash, cash, cash, cash.

Credit, credit, credit.

Cash, cash, cash, cash, cash, cash, cash.

Credit, credit, credit, credit.

>> I'm Spencer.

I make bath salts, and I'm a Biz Kid.

I started making bath salts because of my mom.

She was in a car accident.

And after she was hit, for a majority of the time, she's suffered a lot of pain.

So I started finding different ways I could help her.

You know, she likes taking baths.

She's a bath person.

Then that's why I came up with bath salts.

Welcome to Spencer's Bath Salts' international headquarters.

This is where I do all my mixing and the creation of my bath salts.

Aquatic Splash ready for sale.

So when I first started off buying my supplies for my products, I knew I had to establish some credit.

To get the credit, I knew that I couldn't do it myself, so I had to go to my mom, and we talked about it, and she was very willing to help me out.

>> We went to the bank, went to different banks, and they all told us the same thing: they do not give credit to minors.

So I talked with Spencer about it, and I said, "I'll take out a credit card; you make all the payments," and he said that he would do that.

>> I'd like to make a payment on my card.

>> Oh, I can help you.

>> Thank you.

There are some temptations out there.

I leave the card at home.

So in case I'm at, you know, 7-Eleven and they have a special on Slurpees, I can't whip out my business card.

All right, thank you very much.

See you later.

>> You guys have a good day.

>> In the end, my goal is to have Aquatic Splash in every tub.

>> And now it's time for today's Biz Kids Biz Quiz.

If you said B., you got it.

Congratulations, you're thinking like a Biz Kid.

>> Space, the big frontier.

These are the voyages of the USS Free Enterprise.

Our five-year, seven-month mission: to pursue a course of financial responsibility.

We were on patrol when we heard the ship make a strange noise.

( squeaking ) Scotty, have you identified the source of that noise?

>> Aye, sir.

A warp field gopher chewed through one of the plasma exhaust manifolds.

>> Oh, no!

Are they okay?

>> Aye.

The beast is sizzling a bit, but it'll be fine.

But I need to stop at the planet and get some replacements.

>> Scotty, do you have any cash for that?

>> Aye, I'll just use the Starfleet credit card.

>> To use the Starfleet credit card instead of cash would be highly illogical, Captain.

>> Begging your pardon, sir, but what can you buy with logic that you cannot buy with a credit card?

>> My logic and cash can buy anything and pay no interest.

>> Gentlemen, gentlemen, please.

Now, Scotty, what is the credit limit on that card?

>> About 3,000, sir.

>> And, Mr. Checkbook, what is the balance on that credit card?

>> Sensors indicate that the card's balance is about $3,000, sir.

>> $3,000!

( alarm blaring ) >> Oh, sir, it's got me.

I can't hold on much longer, sir.

>> Mr. Scott, explain yourself.

>> Well, sir, I turbocharged the warp coils, and I put chrome pipes on the plasma exhaust manifolds, just like you said.

>> Well, only cash for you, mister, until you paoff that credit card.

>> I wasn't aware this was Pimp My Starship, captain.

>> But it's so cool.

>> All right, so you don't have enough money to buy something.

What's the first thing you do, go out and get a bunch of credit?

No, the first thing you do is you figure out do I absolutely have to have this?

Do I need it?

>> Substitute Teacher!

>> For me, for example, I needed a car.

>> Why do you need a car, Substitute Teacher?

>> Well, for the ladies.

I mean, come on.

I mean, they see a guy like me, and when I roll up in a car, it's got to... well, you know what?

That's a completely different lesson.

But the important thing to understand is with credit you get more purchasing power.

It gives you this purchasing power.

It's more money, but is it your money?

Is it your money?

No!

It's not yours.

It's not yours.

It's not yours.

It's other people's money.

It's other people's money.

When you buy with cash, it's buy now, pay now-- buy now and pay now.

But with credit, it's buy now, and you keep paying.

You're not just paying for that thing.

You're paying for using other people's money.

So you pay more and more and longer, but at least you get to have some nice stuff, like I got this nice set of... Hey, hey, what are those kids doing to my car?

Get away from my car!

Get away from my car!

>> Substitute Teacher!

>> BOTH: Credit, cash, credit, cash, credit, cash, cash, cash, cash, cash, cash, credit, credit.

>> Blake Blair, M1 Designs.

>> M1 Designs-- as a company, we do graphic design.

>> We have a ton of stuff that we do: wall murals... >> ...album covers... >> ...T-shirts... >> ...custom shoes... >> ...hats... >> ...Xboxes.

We're a pretty versatile company.

I had a vision of a business, but I could never take that next step.

Once I met Blake, it was like just like that.

Everything happened.

>> I'm Blake.

Oh.

>> I'm Chris.

>> I met Chris in math class.

He talked about T-shirts, maybe putting designs on T-shirts and stuff.

And then I brought up, you know, maybe doing it on shoes, X Boxes, and stuff.

And we, like, realized, "Oh, we could, you know, maybe make money off this."

>> To finance building this business and everything, we had to borrow money and start from the bottom up.

You don't start at the top with, like, a line of tees.

You got to make the money.

You got to borrow it.

You got to pay it back.

It's hard work.

>> Not a lot of people realize that when they start a business, you know, they're like, "Oh, well, if I go... if I borrow money, I'm going to go into debt, and that's bad."

>> Credit is a tool that you use to develop your business.

>> Unless you have a lot of money to begin with, you're going to have to borrow money.

You're going to have to take risks.

You're going to have to take chances to succeed.

>> You can't sit back on it and expect everything to be okay.

I mean, there's interest, and you have to pay that back.

Time is money in that sense.

>> I didn't really want to borrow from the bank, at first, because that's automatic interest.

The first time we borrowed money was from my parents for the business license.

>> When the boys first came to us, my wife and I both felt we should treat it just like any other business, and we put together a short one-page agreement that said, "Here's what we're going to loan you, and here's what you have to pay back."

>> That was pretty quick, that we got that paid back.

>> And then our next step was to print shirts, and we had to borrow a lot more money for that.

It was in the thousands, like, and so we borrowed that from Blake's grandfather.

>> That was a big one.

You can't take that for granted.

>> You have all this money in your hands, but it's... you can't get ahead of yourself.

You can't, like, go out and spend it all.

You have to kind of strategically place it.

>> When people think, "Oh, it's just given to me; I can go spend that," and then they're like, "Oh, crap, you know, I just spent all the money that I was supposed to use on other stuff, and now I can't pay them back," and that's when the interest starts building up and up, and then you just got to pay more and more money back.

Credit, cash, credit, cash.... >> ...credit, cash, credit, cash, credit... >> ...credit, cash... >> ...cash, credit, cash, credit... >> ...credit, cash, credit, cash... >> cash, credit, cash, credit, cash... Another successful Xbox 360 job has been finished.

I love...

I love having a business.

What I've learned about borrowing money-- credit-- is that you can't just, like, sit back on it.

You have to make something happen.

I mean, the people expect their money back, and you can't just sit on it.

Plus, interest goes up the longer you wait.

I was thinking...

I think we're doing pretty good.

We're learning from everything and coming out on top, I guess.

>> And when we use credit, we're using other people's money.

Here's what I borrowed, and here's the interest on the money I borrowed.

The rest is mine.

>> How do you do that?

>> It's easy when you're Capitalist Peg.

>> Credit cards are useful, but they can be tricky.

They can make you think you have loads of money, and it can be hard to keep yourself from spending too much.

It's true.

People tend to spend 20% more money when they have credit cards than when they have cash.

>> I went to get jeans and thought, "I've got a card; I've got money."

So I bought myself this purse.

Didn't need it, just bought it.

>> So now you have cool stuff, but you owe the credit card company more money, and they're charging you interest.

That means you paid more for that stuff than it really costs.

>> But credit cards aren't all bad, right?

What about in an emergency?

>> Sure.

Plus, credit cards are the best way to pay for things over the phone and on the Internet.

>> Hey, guys, look what I just bought online.

>> Talk about questionable spending decisions.

>> I heard that.

>> Are you the kind of a guy who spend money for things that you don't really need?

>> No.

>> Yes.

>> Darn it, pa. What are you doing?

>> We got us a big bunch of credit card offers in the mail.

>> Credit cards?

>> Yeah.

Just this week they offered to give us $385,000.

>> We don't need all those credit cards.

Why would we?

>> They're saying they want to help me.

>> These are just stupid offers to make us spend money we don't have.

>> Hm.

>> It's not just free money.

You have to pay it all back, with interest too.

Don't be a sucker, Pa. >> Well, hey, maybe we could just buy a little bit of Idaho.

>> Pa, forget Idaho.

>> Well, how about Montana then?

They got nice parts of Montana.

>> Ugh!

>> We're taking it to the street to ask people about cash versus credit.

Over there.

Excuse me, may I ask you a few questions?

>> Sure.

>> Cash or credit?

Can you define in your own words?

Excuse me!

>> Cash is money that you have in your pocket.

>> Do you have a credit card?

>> Yes.

>> The last thing I bought on credit-- ooh, man, um, gas.

>> Credit is, um, a form of money people give you, and they charge you interest on top of that.

>> Do you know what the interest rate is on your credit card?

>> It'd be about three or four percent.

>> I have a Visa.

I don't quite know the interest rate.

My parents still pay for it.

>> Credit card, you have, like, 20% interest rate.

>> If I asked you to sign up for a credit card with 21% interest, would you say yes?

>> Yes.

>> For the privilege of using this card that says it's like money, they charge you 25 cents for every dollar you spend.

>> Do you have a credit card?

>> No, I don't have a credit card.

>> I do not.

>> No, I do not.

>> Uh, why not?

>> Because I don't want to get into debt.

>> I do have a few credit cards.

>> A few credit cards?

>> I've been caught.

>> I use my credit card for emergencies.

>> What's the difference between debit and credit?

Do you guys know the difference between a credit card and a debit card?

>> Of course, yeah.

>> Debit's coming from your banking account.

>> Debit is where you already have money, and credit is if you... doesn't matter how much, as long as you pay it back.

>> Debit's safer than credit is.

>> If you don't pay your card off completely, then you get a bunch more money added on.

>> Cash you just pay up front.

>> Well, there you have it.

Cash, credit, debit, it's up to you.

Just be a Biz Kid about it.

>> The way you handle your cash and credit tells a lot about you.

It's kind of like when your parents go away for the weekend and they leave you in charge of the house.

( group cheering ) You see, one thing is for certain in the big house of cash and credit, and that is that your parents always come home.

>> If this is your house of credit, you're toast.

>> My name's Nick, I'm 15, and I'm a professional bass fisherman.

The bass, pound for pound, is the best fighting fish around.

That's kind of where I'd want to be, is being able to fish the national tour, and that's the Bass Master Classic, the FLW Cup.

Those are both $500,000 first place prize.

This is my fishing boat.

For my boat loan, I did all the research for the loan, all the different types of papers and legal things that you need.

They pretty much just told me that, you know, since we don't have any... you don't have any credit history, and since you're under 18, you really can't do a loan by yourself.

And so once I found that out, I went to go talk to my grandparents.

They knew I was pretty serious about what I was doing, and they knew that I was trying to work on a career.

My grandparents ended up taking the loan, and it was a $25,000 loan for about six years.

>> You're going to make that payment.

>> This is not an interest-free loan from my grandparents.

>> I haven't even thought about that, about him not paying off the loan.

I'm pretty sure he will.

I have no doubts about it.

>> Being able to have my own boat and being able to go out and fish tournaments as a boater instead of going along with somebody else was a big jump in terms of sponsorship.

If I don't make the payment, my grandfather will repossess the boat.

>> Your word is your bond, and when you give your word as your bond, you're going to make that payment.

If you can't make it, then you do have to do like any other loaner would.

I'd have to take the boat back and set it in the backyard till he paid for it.

>> All the stuff, getting the loan, that's the small part.

But being able to pay it back is the part that you got to think of before you even take out a loan.

I have never missed a loan payment.

Today's payday.

I have to write them a check for $310.

I love bass fishing, but I love my grandparents more.

My name's Nick, and I'm a Biz Kid.

>> One way to think of credit is to imagine it as a family pet.

( dog barks ) If you take care of it, it will be loyal and always be there for you, especially during an emergency.

( dog whines ) >> Good credit.

What a good credit.

Cute credit.

>> As long as you pay off your credit on time, your fees will be small, like a cute little puppy.

( dog barks ) But if you let things slide, those fees will grow into something so big it won't even fit inside the house anymore.

You still have time to tame it again, but don't be careless.

Abused credit will turn on you like a vicious animal.

And if you do it to too many credit cards, well, you'll have a pack of trouble on your hands.

Get her!

( dogs bark and snarl ) She thought it was real.

>> ♪ Fast-talking credit guy!

♪ It's fast-talking credit guy.

>> We also have some very nice amplifiers.

You can shake your neighbors' walls with this unit-- 65 watts output!

>> Yes, I know.

All I want to find out is what kind of a price you have on an XT-65 turntable.

>> An XT-65?

Why don't you really go first class and get one of these XT-95s?

Now, there's a rig, one of the finest made.

Elliptical diamond stylus for perfect tracking.

It's got a recommended tracking force of between one half and two grand.

Adjustable counter weight comes in.

It's just about impossible to damage your... >> ♪ Fast-talking credit guy!

♪ It's fast talking credit guy.

>> But... but... >> Who doesn't love to shop?

And this is my definition of a perfect day-- out shopping in my all-time favorite store.

Look at this.

Perfect.

And I can definitely afford these with my brand-new credit card.

Don't you wish you were in my shoes?

>> You have a good day.

Thank you.

>> That was easy.

>> Hey, wait a minute.

>> Wait a minute.

I just bought these three things for $310.10 on my brand-new credit card, but come to think of it, it might take me about six months to pay this all off, and then I'll have to pay interest.

And if I miss a month, I'll have to pay late fees.

So it'll end up costing way more than $310.10, and then I'll get stressed out, and when I'm stressed out, I'll eat chocolate.

When I eat chocolate, then I break out.

Maybe this wasn't such a good idea.

Let me try it again.

>> How you doing today?

>> Good, thank you.

>> Is this going to be credit or debit?

>> Debit.

I'm using my debit card this time, which means that I'm using my own money from my bank account.

And since I only have $50 in my bank account, I don't think I can afford this all.

So I'm going to be more financially responsible and just buy the T-shirt.

>> Your total's going to be $38.08.

>> That was even easier, and it was smart.

Now, that's thinking like a Biz Kid.

>> Hi.

Financial Genius here.

So you've learned about paying with cash and about paying with credit cards, and you know the difference is, with credit cards, you're using someone else's money that you have to pay back later.

Okay, you've got all that.

So what's a debit card?

Well, you use a debit card just like a credit card in the store.

But instead of using someone else's money, a debit card takes the money immediately from your own account.

So that makes it like cash.

So you're not borrowing from someone else, so you don't pay interest-- pretty handy.

Okay, close that door before someone borrows money from me.

( Miriam laughing ) >> I'm a debit card.

>> And I'm a credit card.

>> BOTH: We look alike.

>> When you use me, you're actually using your own money.

>> Sorry, I don't work that way.

When you use me, you're actually using other people's money.

>> BOTH: But you still have to pay.

>> The difference is that with me, you pay in time.

>> Yeah, but when people use you, they're actually paying more.

They pay the purchase price, plus interest.

What a deal.

>> All right, but when they use you, the money goes straight out of the bank, just like that-- whoosh.

>> So?

When people use me, it's just like using cash, only you don't have to carry around those bulky bills.

>> All right, but what if they want to save their cash?

Then they might just want to use me.

>> Oh, please.

You have no discipline.

>> Oh, let's not fight.

Let's grab a soda.

>> I don't have enough money in the bank for that.

>> Don't worry about it.

I got this one.

>> Here we go again.

>> You sent for me, sir?

>> Yes, Farnsworth.

I want to talk to you about your use of credit-- that is, your use of my money.

Sit down please.

>> Okay.

>> Sometimes I suspect you use credit as a way to get on your feet, Farnsworth.

>> Yes, sir.

>> What are you doing?

Sit down, Farnsworth.

>> Okay.

>> Now, according to my records, your use of credit is on the rise, Farnsworth.

>> All right.

>> Sit down I tell you, Farnsworth.

>> Right.

>> I want you to understand that there is risk for me, the lender, and for you, the borrower, that requires attention, Farnsworth.

>> At attention, sir.

>> Sit down I tell you, Farnsworth.

>> Yeah.

>> By the way, that's a nice suit you're wearing, Farnsworth.

>> What was that, sir?

>> I say I like your getup, Farnsworth.

>> Yes, sir.

>> For the last time, sit down, Farnsworth.

>> Right, sir.

Sorry.

>> That's all right, Farnsworth.

I must say this for you.

>> Yes, sir?

>> You're a standup guy, Farnsworth.

>> You got it.

>> And please leave the way you entered.

>> Will do.

This is me leaving.

>> Okay, so we've learned that credit cards are convenient.

For example, they offer you features like air miles, fraud protection, or they can even give you added buying power when used wisely.

And they're easy to come by.

I mean, look at this.

Now, that's a lot of buying power.

In fact, I think I'm going to go exercise some of my buying power to go get lunch.

I'll have one hot dog please.

( Christina clears throat ) What?

You don't take credit?

Look, I'll pay you extra, just put it on my plastic.

>> Your plastic's no good here.

>> But I have a gold card.

I even have a platinum card and a diamond card!

>> Excuse me.

I have some cash-carrying customers to attend to.

>> One hot dog please.

>> Oh.

>> Thank you.

>> One hot dog please.

>> Uh, wait, I... Hey!

>> Remember, in the land of money, cash is king.

>> Next up in the Biz Kid parade is Cashes King.

That is the famous Cashes King float.

>> Cash and credit.

When you use cash, it's buy now, pay now.

Just hand over the dough, and you're done.

That's the ticket.

And you can jolly well enjoy your purchase worry free.

>> Shoot, I'm hungry.

Mm, hot dogs, six for a Quaker.

Shoot, no money.

I need a credit card bad.

Wow, this is easy.

Just fill out this credit card application.

>> You use credit.

It's buy now with some other chap's money, then you pay them back later.

But you may find it a bit more spendy than you thought.

>> Fellas, the interest payments are killing me.

>> A lot of people use credit cards nowadays, but how do they really work?

>> Hey, Miriam, what's with the bricks?

>> Here, hold this.

>> Okay.

>> Let's say that these bricks represent the amount of money that the cret card company is comfortable lending you.

Now, as you spend money, the money that you take from here becomes your balance, or the money that you're going to have to pay back eventually.

it back, then you can spend the >> Yes, except that after a certain amount of time, the company is going to start charging you money for using their money.

>> Oh, and that's interest.

So your balance gets bigger the more you buy, and they're going to charge you interest for as long as you have a balance.

So until you pay some of it back, you're paying a lot of money for the things you buy.

>> Except that if you spend all of the money that the company gave you, then you've reached your credit limit.

>> Credit limit is where you can't spend any more money with the credit card until you pay some of it back.

>> And this can be a problem, especially if you're going to have a hard time paying back all of this money.

So be careful, because if this happens... >> You could get buried.

>> Credit cards are very, very powerful tools.

>> Oh... >> She got hair all over the mic.

>> Oh!

>> This kid is quite a Biz Kid!

( alarm blaring ) >> Ah!

( Laura laughs ) >> ...seen the ship?

It's gleaming with pimpness.

>> Highly illogical, Captain.

>> Oh, and it looks like the inexperienced Cash is being boxed right out of the ring now.

Credit is pouring it on, and it looks like Cash is flattened for keeps in two minutes and 51 seconds in the third round.

He's out!

>> Ah, I told you so.

>> Hey, do you know a successful business?

>> Maybe you're a Biz Kid.

If so, we want to hear about it.

Got some video?

We want to see it.

>> So check out bizkids.com to find out all the details, and maybe we'll see you on the show.

>> Yeah, like us.

>> What's so special about us?

>> We're on TV.

>> Does make us pretty special.

>> Yeah.

>> Just check out the Web site, because if you're a Biz Kid, we want to hear from you.

>> Production funding and educational outreach for Biz Kids is provided by Coalition of America's Credit Unions, where people are worth more than money.

A complete list of individual credit union funders is available at wxxi.org.

>> Every day, America's credit unions help members with their financial needs.

And with programs like Invest in America, it's only fitting that credit unions support Biz Kids, because financial education is what we do.

Learn more at lovemycreditunion.org.

Captioned by Media Access Group at WGBH access.wgbh.org