Junior Achievement Official: Good Credit May Begin With Good Parenting
by Ed Thomas
April 26, 2006
(AgapePress) - - A recent poll reveals increasing numbers of teenagers now possess and use credit cards. Nearly 20 percent of the 18-and-older teens surveyed reporting possessing and paying with plastic in the 2006 Junior Achievement Interprise Poll on teens and personal finance. Across the United States, 1,474 students were polled through a combined effort of the Allstate Foundation and Junior Achievement (JA), a worldwide program for teaching young people about business. The two organizations have joined with the U.S. Department of Treasury in a financial literacy campaign called "Taking Ownership of the Future." The survey is part of this effort.
Of the ten percent slice of students polled that acknowledged having credit cards, a little over 15 percent of this group pay only the minimum amount due on their credit accounts each month. One JA spokesman sees this tendency among teen credit consumers to create and then carry a balance for extended periods as an alarming trend as well as a possible indicator of financial problems ahead.
Dr. John Box, JA's Vice President of Product Development, suspects two factors could be responsible for that statistic. Either these are card users who become over-extended right from the start, he says, "and they max out their cards and just don't have the money to make the full payments each month," or they are those who "miss the payment completely."
The issue, Box asserts, is one of responsibility, and he worries about that despite the 84 percent of teen credit card users that do pay more than the minimum amount due each month. Even small, seemingly insignificant financial habits can set the tone for the future, he warns, and mothers and fathers really need to teach their kids how to handle credit wisely from childhood.
"To me, at that age it's really as much a parental oversight responsibility as anything else," the Junior Achievement official says. "I'm a strong proponent of providing kids as young as possible with their own level of responsibility in earning their own money, saving their money, and spending their money."
If young people are taught a good foundation of wise credit habits, Box contends, they should be able to become part of the percentage of credit users who pay on time and pay more than just their minimums. It really comes back to parents providing lessons and oversight as part of allowing kids the privilege of beginning to use credit, he says.
Teaching good credit habits to teens can help them avoid bad credit, bankruptcy and many other financial problems common to the American family in the years to come, Box adds. He believes parents who take that responsibility seriously make every effort to mould their kids into people who will use credit wisely and responsibly in the future.
Ed Thomas, a regular contributor to AgapePress, is a reporter for American Family Radio News, which can be heard online.
