April 20, 2005
Teens and Credit Cards
(Filed under: Money)11% of teens who participate in the Junior Achievement program (what's that?) carry credit cards, some as early as 13 or 14. 82% of those teens pay their balance in full every month, which is probably better than most adult credit card users.
It's never too early to learn proper financial management. I know, I know—it sounds boring as all get out. But making smart money choices can save you a lot of hassle. Credit cards aren't just free money.
Let's say you charge $50 worth of clothes at the mall, or maybe a few DVDs. The bill comes and you decide to make the minimum payment, say $10. At that rate it will take you 5 months to pay off your little shopping spree. But wait—you forgot interest. Let's say the card has something like 18% interest, which is ridiculously high, but that's what you get with credit cards.
Next month rolls around and you don't owe $40, you owe $47. So your $10 monthly payment plan won't pay off your debt in 5 months, it'll take 9 months. Your $50 spending spree ended up costing $90, almost double.
Now doesn't proper financial management sound a little a cooler?
Posted by Kevin D. Hendricks at April 20, 2005 09:39 AM
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