Teaching Young People to Avoid Credit Card Debt

It is shameful the way credit card companies pander to young adults, but adult is the key word here, and they are free to eat pizza, go to shows and get their own share of credit card debt.  In college campuses across the country, such as Emory University in Atlanta, student unions are full of vendors giving away credit cards and little trinkets to get kids to sign up as soon as they register for classes.  Little do these young adults realize, unless you've warned them ahead of time, debt might occupy a larger part of their future lives than even a college loan.

And there is plenty of reason a college kid, away from home for the first time, would “need” to purchase things on credit.  After tuition and books, there's very little left over, especially if you're used to having things taken care of in grand style.  However, now that your child is 18, you can't make her or him do anything, so you'll have to rely upon early training to steer them clear of credit card debt.

Of course, it is the rare teenager who wants to listen to you or anyone drone on about the benefits and dangers of compounded interest.  However, you'll have to bring the topic of interest payments and the high-interest rate nature of credit card companies up at some time.  It seems so unfair when you're first introduced to it, that most teens don't think that it's even legal to allow people that much rope to hang themselves.  

Allowing your kids to see your statements and explaining the difference between principal payments, even outlining how minimum payments are designed to encourage credit card debt can be done in such a way that even your kid isn't bored to sleep.

This does assume that, as a parent, you have a handle on credit card debt concepts yourself.  If you don't, now is a good time to learn.  If you do find yourself going to a credit coaching class, take your kid with you, even if they're still in high school.  You never know what will get in their heads and stick.

Teaching your children to use credit wisely and avoid credit card debt is something you can begin at a young age, by always emphasising that anytime you use your card, it has to be paid on the other end.  Encourage them to start their own budgets – that is, after all, what allowances are really for.  You could even extend them a little credit of your own and discuss the consequences of it each and every time they use it, right or wrong.  As a grown up, you can set things up so they cannot fail to see the danger involved.

Ultimately, it's up to them to get the message, but as a parent, you mustn't be loathe to discuss such matters with children because you don't want them at the mercy of predatory credit card companies later in life, especially when they're just getting started.  So, do your kid a favour.  Credit card debt is never easy to crawl out of, and unsustainable spending practices are even harder to change.

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