Parents send their children to college to become prepared for a better job and be financially independent and stable. Along with educating our youth through college credits, parents need to educate them on using credit responsibly.
When college students are applying for credit cards, parents should teach them to look at the annual percentage rate and the method of calculating their balance. Encourage your teens to read all of the terms and conditions for the credit card they are applying for. Compare with all of the other credit cards and make sure they are getting the best card for their situation.
Remind teenagers that the tendency to overspend when using credit cards must be guarded against. Caution them about keeping their spending well below their limit. Also discuss that the interest rates are always high on borrowed money and will become unmanageable in a short period of time if credit is overused.
Discussion about the need to pay the balance in full each month is important. If the teen is unable to pay in full, at least encourage payment of more than the minimum amount each month.
Another important point to educate your teen about is the importance of paying the bill on time. Failure to do this will result in a bad mark on their credit record. Explain to your teen the importance of keeping a clean credit history.
Educate your teen about the ways that a positive credit history will help them to get around in life. The ability to rent an apartment, get a cell phone, buy a car and even get a job are all effected by their credit record.
Taking financial responsibility is as important to a young adult as the college degree they are earning. It is an extremely valuable lesson in life that will help them to succeed.
