| | | | Understanding Teenage Credit Card Offers |
By Bonnie Conrad
When I think about credit cards, what I remember is how excited I was to finally have one, and how difficult it was to get one. Even after several months working at a reasonably well paying job, it was difficult for me to get banks to extend even a meager amount of credit. I finally scored a credit card tied to the bank where my checking and savings account were ensconced, but it took several months, and many rejections, to get that first credit card.
Of course all this took place several decades ago, a lifetime for many teens and young adults. Indeed, many teenagers and young adults cannot conceive of a time when credit was difficult to come by, and when cash was used for the majority of purchases. I grew up in an age when gas stations, supermarkets and most restaurants did not accept plastic as payment, and a time when credit cards were coveted and difficult to get.
Those days are mostly gone now, and these days credit card companies seem to be chasing anyone and everyone with a Social Security number and a steady job. Even college students and sometimes high school students are being bombarded with credit cards offers, complete with freebies like t-shirts, music downloads and even concert tickets. With all these incentives, it is no wonder so many young people are taking the bait, and ending up with thousands of dollars of credit card bills as a result.
Credit cards themselves, of course, are not inherently bad or evil, and many people can and do use credit cards responsibly, as a convenient way to pay for everyday purchases, as a great way to earn airline miles and other rewards and as a way to use someone else’s money for a month. The key to making that strategy work, however, is to pay off the credit card religiously, in full, at the end of every month. Doing so can require lots of fiscal discipline, and fiscal restraint, and it is important for parents to instill that kind of discipline in their children.
The time to teach these important lessons, of course, is not when that teenager gets his or her first credit card. Rather, that financial education should be continuous and ongoing, consisting not only of formal lessons about the value of money and the importance of money management but of concrete examples of fiscal discipline on the part of the parents. These real life lessons can be far more important than all the book learning in the world.
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