Americans are simply inundated with credit card debt. We are a country in the
red, starting from the federal government on down, and it’s no surprise we’re in the
financial mess we currently find ourselves. Although we could spend all day wagging
our fingers at the government and our trillion dollar deficit, the truth is it’s up to us
parents to show our children the way. Credit should be a resource, a way to qualify
for major life purchases such as cars and houses, and a fall back in unexpected
emergency situations. The problem is, most people don’t use their cards this way. Kids
are impressionable, and they look to us to show them the proper approach to life. But
parents are also battling advertising, and billion dollar corporations that make their
money on ill-prepared young adults getting in over their heads. If you want to help them
avoid the pitfalls of debt, here are the top five things to teach your kids about credit
cards.

First and foremost, a free t-shirt isn’t a good reason to take on a credit card.
Although the Credit Card Act of 2009 made it much more difficult for card companies
to profile young adults and push them into picking up a card with free giveaways and
spring break contests, that doesn’t mean they aren’t finding other ways to target our
children. Our kids watch us flashing the plastic when making purchases, and they want
that very adult experience. But you have to teach your child to look at the real financial
benefits and detriments of every us bank credit card offer, and not to pick one up because of some free
enticements.

You also must explain how building credit works. A good credit score takes you far
in life. It allows you to buy a car when you need one, and qualify for a mortgage at a
reasonable rate. And it doesn’t happen by accident. Teach your kids how credit is built,
through consistent purchases paid off in full each month. And be very clear about the
consequences and limitations they’ll [Read more…]