It is a common practice for banks and other lenders to send credit card offers to students shortly after their high school graduation. Some students see these cards as a way to cover their college expenses and pay their bills as they start their new lives as adults. Many students get caught in the trap of minimum payments which can ruin their credit score. It also can lead to an uphill battle against an ever-growing mountain of debt. Schools and parents can help students avoid this pitfall by providing them with a solid financial advice about debt.
This information can be weaved into academic courses. For example, in math class, teachers can have their students work on units that compare credit card interest rates and calculate how much money a person might spend on interest if they were to only make minimum payments. English classes can assign students argument papers on the topic of saving money to buy a car with cash verses buying it with credit. Humanities teachers can ask their students to read articles on the impact that credit card debt has had on our society. Financially conscious lessons help students to think about the consequences of debt and the need to be cautious around credit cards. At home, parents can lend their kids money and have them pay it back with interest. Giving penalties or late charges will give them a realistic view of how debt works as they transition into adulthood.
While some may argue that there is a time to acquire good debt, we should all work to ensure that students are able to navigate the world of debt. Paying more than the minimum payment, receiving good interest rates, making payments on time, and avoiding predatory lending are lessons to be taught. We want to avoid the financially crippling effects of unnecessary debt early.