Youth and Credit Cards – Monterey Herald


Question: Years ago, I remember reading a column you wrote about the dangers of student credit card debt and telling the story of a student in credit card debt. I remember laughing and saying that my wife, a real “helicopter” mother, would never allow this to happen on her watch. I’m not laughing anymore because we recently discovered that our son was hiding $7,000 in credit card debt on a credit card we didn’t know he had. In addition to using the card for purchases, he took cash advances to fund an unwitting brokerage account, losing all his money on Gamestop stock. For the benefit of other parents, can you please reprint this column?

Answer: Education about the dangers of misusing his credit card certainly prevented his current debt situation. Unfortunately, like many adults, he learns the hard way!

When my children turned 18, the flood of credit card solicitations began. Perhaps I was naïve to be so appalled by the blatant attempts to introduce them to a life of debt by offering them all sorts of “payback bonuses” and calculators, pens, etc. free.

As many of us adults have discovered, acquiring credit debt is much easier than paying it off. It’s so much fun to buy and top up, buy and top up, buy and top up, etc. However, it’s so painful when the credit card bill comes in the mail. Having the will and ability not to spend beyond our means is usually an emotional function, not an intellectual one. In other words, even the smartest of us find ourselves buried in credit card debt because we can’t resist the emotional temptation to buy something NOW. That said, do you trust your 18-year-old son or daughter to have the emotional strength to resist whipping out their credit card every time they see something they must have?

Of course, you can arrange with your child to “monitor” his or her card(s) in order to establish future credit. However, do not forget to educate your child. Unfortunately, our high schools do not offer regular courses or programs on personal finance and the dangers of acquiring and controlling credit card debt. Most of us learn the hard way – when it’s too late and we’re already in debt. For parents reading today’s column, please make the effort to educate your children about credit card debt and the interest factor. It will be time well spent. Remember, if your child gets into debt, who do you think they will turn to for help? That’s right, YOU!

When it comes to cash advances and “get-rich-quick” stock investments, I suspect your son has learned a few lessons as well. You have my condolences!

Barry Dolowich is a CPA and owner of a full-service accounting and tax practice in Monterey. He can be reached at 831-372-7200. Please direct questions to Barry at PO Box 710 Monterey, CA 93942 or email: [email protected].


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