Teens and Credit Cards
Sam Chapman
September 23, 2010
If you have a teenage son or daughter, have you taught him or her about money management? More specifically, have you taught your teenager about credit cards?
I have a 16 year old daughter. She will be off to college in a couple years. One of the first things she will be hit up for is a credit card. Credit card companies love to get college kids hooked on credit. They usually give them a relatively low credit limit, but many kids end up charging right up to the limit and then they don´t pay off the balance. The result is a small finance charge every month.
Banks and credit unions do this because they know that millions of college students will carry a balance on their credit cards. It might just cost one student a couple of bucks a month in finance charges, but add that up over millions of kids and see how much money the credit card companies are making. This may not mean anything to your teenager, but the finance charges can get out of hand fast if they are not careful over time.
As students continue through college, they may accumulate several cards. If they do pay the balances down to at least half and start working, their credit limits will probably go up. As credit limits go up, so do balances in many cases. It may be more important to some young working people to pay off student loans than to pay credit card balances down or off completely.
Sp parents, have a talk with your kids. Teach them about credit. Credit cards will probably be the first thing to talk about, but student loans, car loans and loans for furniture and electronics might be in their future. If kids don´t understand the truth about credit for kids, they may get into a financial hole early in life. That is a very bad thing.
Author Bio:
Sam Chapman is a dad and an Austin real estate agent, part-time teacher who also writes about What My Parents Didn´t Teach Me.
I have a 16 year old daughter. She will be off to college in a couple years. One of the first things she will be hit up for is a credit card. Credit card companies love to get college kids hooked on credit. They usually give them a relatively low credit limit, but many kids end up charging right up to the limit and then they don´t pay off the balance. The result is a small finance charge every month.
Banks and credit unions do this because they know that millions of college students will carry a balance on their credit cards. It might just cost one student a couple of bucks a month in finance charges, but add that up over millions of kids and see how much money the credit card companies are making. This may not mean anything to your teenager, but the finance charges can get out of hand fast if they are not careful over time.
As students continue through college, they may accumulate several cards. If they do pay the balances down to at least half and start working, their credit limits will probably go up. As credit limits go up, so do balances in many cases. It may be more important to some young working people to pay off student loans than to pay credit card balances down or off completely.
Sp parents, have a talk with your kids. Teach them about credit. Credit cards will probably be the first thing to talk about, but student loans, car loans and loans for furniture and electronics might be in their future. If kids don´t understand the truth about credit for kids, they may get into a financial hole early in life. That is a very bad thing.
Author Bio:
Sam Chapman is a dad and an Austin real estate agent, part-time teacher who also writes about What My Parents Didn´t Teach Me.
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