High school graduation season is coming up and it marks the beginning of adulthood for many young people. I was in no way ready to make financial decisions like getting a credit card when I graduated from high school. I didn’t even seek one out, but the credit card companies found me. Not sure if I took the first one or not but I do remember it had a $1,000 limit – I didn’t have to show income of any kind, just sign on the dotted line. I remember I had friends at college who had more than one credit card with total limits over $5,000. This was a long time ago and I can only imagine how many more offers today’s college students receive. The credit card companies were willing to take a chance on me just because I was enrolled in college and that I might have a good job some day and their card would remain the one I use. My parents and I never discussed credit cards so I went into it blind and seemingly willing to learn lessons the hard way.
And did I learn a hard lesson. Before I knew it, I had maxed out the card. Didn’t really have much to show for it other than a pretty cool stereo. The credit card company sent a bill and I realized that now they expected me to pay. I’ll never forget the feeling of being overwhelmed by that realization. Luckily my wife to be was able to help me get a job working at a day care. All of the money I earned went towards paying off that credit card. All of the money my wife made went into her pocket. She too had a credit card but it was a card from her credit union that her dad sent her to college with and gave her clear instruction on what it was and how it should be used (for emergencies only).
I never forgot that lesson (if I’m completely honest I think I maxed it out three times before I truly got it) and for the most part in our early marriage preferred debit to credit. Now that I’m adulting I have a good grasp on using our credit cards wisely and I think I’ll do like my father in law and be proactive with my daughter when she heads off to school. If I don’t, I have a good idea of what could happen – she is my daughter after all. So my advice to all the parents out there – don’t let the credit card companies be the first to talk to your kids about credit cards.
The lessons learned:
- If you don’t talk to your soon to be adults about borrowing, in this case, credit cards, then someone else will. Most likely it will be someone selling them on the idea of their first credit card or loan. Consider cosigning with them on their first credit card with a lower limit so you can be a part of the process.
- If you can’t handle a credit card, keep it at home when you are out and only take your debit card to reduce impulse control. It would have saved me while I was in college – I don’t even have that stereo anymore.
- If used correctly, credit cards can be an important part of a person’s financial life. So many rewards cards incentivize usage and I’ve been able to pay for airline tickets, cruises and other big ticket items with points from reward cards.
Post author: Jamieson Mackay, CCUFC
The opinions expressed on this page are those of the credit union’s Certified Credit Union Financial Counselors, staff members and other authors and may not reflect the views of the credit union. Information is for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of each article.