Tips to Help Your Teen Establish Good Credit Habits, be Debt Free and Stay That Way
(Savannah, GA) What could be scarier than your teen driving for the first time? A teenager, with a credit card. Consumer Credit Counseling Services of Savannah recommends parents take action now to show teens the value of good credit history and smart financial decisions.
CCCS suggests the following tips to share with teens to help them manage credit responsibly:
• Consider starting your teen off with a credit card tied to your account. Not only will your teen get a good credit rating, but it will also allow you to see how much they are spending (and in some cases, what they are buying). Consider allowing them to use the credit card, first, for emergencies only and then encourage charging only what can be paid when the bill arrives. This will hopefully curb your teen from taking advantage of the credit card.
• Set limits and review monthly statements. Give your teen a maximum amount that can be charged each month. When the bill arrives, sit down and review your statement with them so that you can make sure they understand how to read the statement. You can also show them how fast charges appear after swiping as well as point out the accrued interest if the bill is not paid in full each month.
• Teach your teen to be aware of the risks of credit card fraud. Identity theft and credit card fraud are serious issues. There are nearly 700,000 consumer fraud and identity theft complaints in the United States every year. Fortunately there are ways to protect your credit, including never letting someone borrow your credit card and never leaving your card or receipts lying around for anyone to see. Also, never give out your credit card number unless you know it is a legitimate company or organization. When in doubt, don’t give it out.
• Calculate payments. Find a pay off calculator on the web and show your teen how long it will take to pay off their credit card if they carry a balance from month to month. Since credit cards have very high interest, teach your teen that paying the minimum payment will keep the debt growing – even if no other purchases are made. Visit www.debtadvice.org for calculators and other resources.
• Explain to your teen why maintaining good credit is important. How you handle your credit now has a big impact on your access to credit later. In addition to banks and credit card companies that pull your credit report, let them know that even property management companies also pull credit reports. They need to understand that credit plays a big role whether applying for a loan, purchasing or renting a home or car and even signing up for utilities. Make sure they know that paying bills on time is crucial. As a consumer, you and your teen are entitled to a free copy of your credit report every 12 months. You can order a credit report at www.annualcreditreport.com. or call 1-877-322-8228.
• Hold back on rescuing your teen. Try as hard as you can not to bail out your teen should they charged more than they can afford to pay. Instead, offer to visit a credit counselor with your teen to encourage reaching out for help when in financial trouble. Help is available. To schedule a confidential appointment, contact CCCS of Savannah.
Teaching your teen to be credit smart and money conscious will provide a foundation that allow your teen a lifetime of proper financial decisions.
CCCS of Savannah was established in 1965. It is a non-profit community based organization that helps people manage debt by setting up a budget and payment plan. To date, the local CCCS offices have returned more than $70 million to creditors; money that would have otherwise gone unpaid or been lost to bankruptcy.
CCCS of Savannah is open from 9am-5pm Monday through Friday. Evening appointments are available at 4:30 and 6:00 on Tuesdays and Thursdays. The office is located at 7505 Waters Avenue, Suite C-11. For more information, log on to www.cccssavannah.org or call 912-691-2227.
In addition to the main office, there are several CCCS satellite offices. They are in Statesboro (912) 489-2227, Brunswick (912) 261-0060, Hinesville (912) 370-2227, Beaufort (843) 379-2227.