My goddaughter came to visit recently. While at dinner one night, we talked about many different things. The dinner conversation included everything from cooking to my book to hairstyles to dream vacations to challenges in our respective work places to The Lyfe Magazine, and more. None of that was unusual. What was unusual, however, was the question she asked me: “Can you write an article for young people about the importance of credit?” Huh? I didn’t see that coming!
My twenty-eight year old goddaughter and her twenty-nine year old friend each chimed in with “Yes, please. Kids need to know early the importance of credit.” I was blown away. Not sure why I was so shocked. It’s true; kids do need to know early about credit. They need to know why a good credit rating is important, how to build one, how to maintain it, how to be aware of the pitfalls of credit cards, and so much more.
Credit Card Applications Come in the Mail
As we continued talking, my goddaughter told me something I already knew. As soon as kids graduate from high school they start receiving applications for credit cards in the mail. I’ve seen them; they come in the mail for my daughter periodically. I rip them up and throw them in the trash long before she even has an opportunity to see them. (Yes, I realize I just admitted to a Federal offense of destroying someone else’s mail.) My daughter knows the purpose of credit cards (the version the credit card companies want her to know) and my efforts to limit her opportunities to apply for them may be in vain. It just makes me feel better to think I’m sparing her from a potential disaster because she is not yet ready to have one; and, to the best of my knowledge, she doesn’t…yet!
When I graduated high school, I don’t remember getting credit card applications in the mail. They waited until I was on campus at the University and sent them to me there. It’s funny because I can actually remember opening one and thinking “But I don’t have a job. How do they think I can maintain a credit card?”
My goddaughter’s comments made me do a quick retrospective on what I’ve taught my daughter about credit and money matters in general. I’ll have to be honest and say, not enough! I am fully convinced, however, it’s never too late. This is especially true if we are able to share with our kids personal examples of good and bad credit / financial decisions we’ve made. Kids tend to think their parents have never made mistakes. They think we haven’t had challenges to overcome. They believe we woke up to find ourselves as parents who simply get joy out of telling them what they should and should not do, not realizing we are often times giving the advice based on our own mishaps.
If you’ve recently graduated high school or are in college and receive an application in the mail please evaluate your true need for it first. Talk with your parents or another trusted adult before mailing the application back. If your school offers a personal finance class, please take it. You have no idea what you don’t know until you learn it!
Opening a credit card account and purchasing items you have no ability to pay for is not a wise decision. The consequences of that decision can be far-reaching and will follow you for quite some time. Bad credit can hinder your ability to secure certain types of jobs, will cause you to pay a higher down payment when buying a car, and even affect your ability to get an apartment/house.
Education is your best defense against the potential pitfalls of credit. Learn all that you can, as early as you can.
Thank you, Swanniqua Smith, for caring enough about the younger ones coming behind you to ask for this article!