Do your Kids understand the Dangers of Credit Cards?

Credit card debt is over 1 trillion dollars. I know that my generation is responsible for most of that debt. I remember going to college in the 80s when credit cards were so easy to get and seemed so harmless. Little did we know that it would turn into a financial monster. 

Fortunately, these generations in their teens and 20s are way more financially responsible than those who came before them. To make sure they understand, read them the following; 

Credit Card Debt does the following for you. 

• Allows a consumer to sign a legally binding contract where the credit card company can change the details at any time and for any reason. 

• Allows you to be sued if the credit card balance goes into default.  That could happen for something as minor as being late with a premium payment.   

• It makes you legally responsible for court, attorney, and all fees if you are sued. 

• It can lower your credit score and make it more challenging to get a job. 

• It allows you to pay 30 to 40% in interest charges on outstanding debt 

• The cardholder company can reduce benefits and/or close your account if they discover you are having trouble with any other credit cards. They can check your credit files – you give them permission. 

• Puts you in the position of being harassed by debt collectors  

• If you default on that debt, you will legally owe it and likely put up with it for the rest of your life. 

• Can increase your premiums on your Property and Casualty insurance 

• Finally, it could prevent you from being able to buy a house or even rent an apartment. 

All of the above can be yours if you are irresponsible with debt. Do yourself a favor; NEVER carry a balance on a credit card. It is just not worth it!   

 

Bob Brooks is the host of the Prudent Money Radio Show, heard every weekday from 3:00 PM - 3:30 PM on FM Radio 91.3 KDKR