18 Yrs Old & A Credit Card, A Dangerous Combination

How important is our credit to us? As an 11 year lender, I have to say it is very important. It is so important, that it could mean literally thousands of dollars saved or thousands of dollars spent whichever way you want to look at it. I would like to share my first experience with a credit card. I was 18 yrs old and I was at my freshman orientation at the university I attended. Tell me if this brings back memories and I’m sure most freshman orientations are pretty much alike across our country. You have class advisors available to you help with your degree plan, then you have your sororities soliciting their clubs, then you have the busiest section of the arena, the “get your credit card here.” At 18 yrs old, the thought of have buying power at my fingertips and then making a small $20 payment month sounded like a winner to me. Little did I know that a $2000 credit card debt would take almost 15 years to payoff. YES, it’s true. You take a $2000 credit card debt at let’s say 21% interest rate give or take, making a minimum payment of $20 a month, it will take you more or less 15 yrs to payoff. This was no longer a winner for me, and it all started at 18 yrs old at my freshman orientation.

Through personal research I’ve done, I’ve read different articles stating that the credit card companies’ target college students. Some of the reasons stated are, college is expensive to begin with, and with parents exhausting all their funds just paying for tuition, living expenses, and books, parents are pretty much broke, and cannot provide additional funds for a student life. So this is where a credit card comes into play. This is where at 18 yrs old we do not understand that we have to pay our debt back on time every month without fail. Unfortunately, when we cannot meet these obligations, this is where our credit begins to suffer. This brings me to my second reason why credit card companies’ target college students. I’m a parent of three, and as a parent I want to give my kids the best opportunity in life that they can have, and as a mature adult we understand that we have to have good established credit to make major purchases like your home. And because of this reason alone credit companies take a big risk on college students and hope that all parents in America love their children enough that they are not going to let bad credit ruin their child’s future. A good example, I once attended a seminar where collection manager said he had great success in collecting credit debt from students by just calling their parents. I’m not an expert in law, so I don’t know if this method is correct, but imagine receiving a call from a credit card company saying your child’s credit might be ruined if his credit card doesn’t get paid? I don’t know about the rest of America, but I’m going to do what I can to save it, and then of course followed by a long lecture to our child.

Now we begin to see a little of how important it is to educate our kids about credit, debt, and how important it is to them in the future. From here I would like to talk a little about thinking outside the box, but still with the same concept of giving our children the best opportunity in life that they can have. I have decided to do something different for my kids. I have started a different approach that will benefit my kids in the years to come. I have decided to break the chain of your traditional saving for college tuition. Instead I have started to think like an entrepreneur and look for opportunities around me every day. Now my kids are still going to go to college, the only difference is I will have instilled in them an entrepreneur mindset that they will not need a credit card to get them around. Hopefully I can inspire others to do the same.

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