02:44:18 AM Thursday, April 10, 2008

Waving a Farewell to Credit Card Illiteracy

Everybody knows about the importance of credit education, as well as about the significance of one's credit score. As a rule, education is associated with younger generation. Kids and young adults are considered to have a more receptive mind, they perform better academic aptitude, they grasp new information really fast. But if you turn to credit card statistics, you will find some surprising counter-evidences to the above-mentioned statements.

When you hear about filing for bankruptcy, you, probably, imagine a mature person with some serious financial problems. However, bankruptcy filers in practice turn out to be much younger. The number of 25-year-old bankruptcy filers really impresses. So, what is to be done about it?

The reason for credit card debts and misuse of student credit cards by young folks is quite clear. The main problem here is lack of experience. But such reasons as the false feeling of total buying power that credit cards give, especially to young people, and poor knowledge of credit card management basics should neither be disregarded. And bankruptcy judges and attorneys claim that it is high time to pay more attention to young people's credit card education, and launch new credit-educational programs.

According to the opinion polls, parents and school teachers avoid money talks for some reasons. There is a common belief that teens are too young to get the concept of credit. And that is a big mistake. Some adults are so much into their work, domestic chores, and personal interests, that they just have some time to ask their children "Hey, champ! How was your day at school?". Some parents just do not want to take pains and explain credit terms and notions as simply as possible.

That is where all those credit card bankruptcy cases and $ 8,000 credit card debts come from. Plus numerous credit card ads young people get by mail, e-mail, and see on TV. John C. Ninfo, a bankruptcy judge from Arizona, got really tired of seeing young people in the courtroom. Together with other judges and attorneys he decided that there is a better place to learn about laws, rules, and regulations concerning credit. Court officials give lessons for Arizona high-school and college students in order to put an end to financial illiteracy among youngsters.

Fortunately, the status quo is changing for the better. New credit educational programs have already been introduced in 47 states. At classes students and teachers discuss essential points concerning credit cards. Credit history, credit card penalties, minimum payments, credit score, credit cards features, fees and rates, credit card debt, the reasons of it, and the ways to eliminate it as soon as possible, different credit card types (balance transfer cards, instant approval cards, etc.). Nothing associated with credit is overlooked.

Well, it is definitely a good thing that youngsters are taught to handle credit cards. Of course, we will see whether such programs prove to have a positive effect on financial future of the rising generation in a few years. But credit education by no means should be underestimated. Knowledge is power, and I hope, my kids will master this power, so yours do.