The amount of debt carried by teens and young adults from the ages of 18 to 24 has gone up over 100% since the year 1992. Given that as these young adults are spending up to 30% of their income to pay for this debt, it is important that teens and the parents of teens address the credit-card debt issue. Here are a couple of reasons why parents and their kids should talk about how debt can be eliminated and why it’s important never to own a credit card.
The Demographics
Teens are the target for credit card companies nowadays. In fact, the marketing of credit cards to teens and young college co-eds is so common, that many teens and parents of teens will argue that these young adults should get credit cards in order to establish credit. However, a credit score and even the famous FICO score, which is necessary to buy a home with a mortgage (with some exceptions), relies on a person getting into debt. Basically, the person who has a credit score is advertising how much debt he/ she has had in the past in order to get more debt in the future.
Compounding the Issue …show more content…
Many of these same people will allow themselves to take on student debt in order to pay for their educations. Additionally, many who get student loans may be lulled into a false sense of complacency due to the fact that they will not have to pay for their student loans until they finish school. The average graduate leaves school with $37,000 in student loan debt. Chances are good that these same student loan borrowers will end up with about $5,000 in credit card debt, leaving them with more than $42,000 of debt once they leave school. In light of this, it is imperative that teens and the parents of teens educate themselves about possible financial
The Demographics
Teens are the target for credit card companies nowadays. In fact, the marketing of credit cards to teens and young college co-eds is so common, that many teens and parents of teens will argue that these young adults should get credit cards in order to establish credit. However, a credit score and even the famous FICO score, which is necessary to buy a home with a mortgage (with some exceptions), relies on a person getting into debt. Basically, the person who has a credit score is advertising how much debt he/ she has had in the past in order to get more debt in the future.
Compounding the Issue …show more content…
Many of these same people will allow themselves to take on student debt in order to pay for their educations. Additionally, many who get student loans may be lulled into a false sense of complacency due to the fact that they will not have to pay for their student loans until they finish school. The average graduate leaves school with $37,000 in student loan debt. Chances are good that these same student loan borrowers will end up with about $5,000 in credit card debt, leaving them with more than $42,000 of debt once they leave school. In light of this, it is imperative that teens and the parents of teens educate themselves about possible financial