teens by pengtt

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									                           Is Your Teen a Wise Money Manager?
    It’s August and many families                                                  paid off — and the consequences
are busy packing their high school                                                 of paying late includes a hefty fee
graduates off to college. Have you                                                 and, potentially, a bad credit
checked everything off your list                                                  report. Encourage your student
clothes, sheets, towels, and a credit                                              not to apply for a credit card just
card? More importantly, is your                                                    to get the free t-shirt being
college freshman ready to handle the                  Tips from your               offered.
responsibilities that come with a                  Community Banker
credit card?                                                                         Students should understand
                                                                                that from the time they make their
     Many parents actually prefer                                               first purchases with their own
their students to have a credit card to                                         credit cards, credit bureaus will
pay for essentials such as books, school supplies,             maintain their credit histories in the form of a
and gas and have already allowed their teenagers to            credit report. A credit history will be reviewed by
be “uses” on their credit cards or have allowed                future employers, insurance companies, apartment
their teens to have his or her own credit card with a          managers, and consumer businesses such as auto
low limit in order to acquaint them with the ins and           dealers. Maintaining a positive credit history is an
outs of money management. Parents also feel more               important responsibility.
secure knowing their students will have the ability
to take care of an emergency situation with a credit               Most students, both high school and college,
card.                                                          want to prove they are capable of managing their
                                                               own lives, independent of their parents. This is just
    It’s a good idea that parents and teens sit down           a part of growing up. But to accomplish this goal,
to predetermine the amount that he or she is                   they must prove they can be responsible money
allowed to charge each month and be sure your                  managers.
student understands the importance of keeping
some of their credit limit in reserve for an                       Most parents reading this column would never have
unexpected emergency. By adding a teen to the                  dreamed of having their own credit card in college. But
                                                               today’s students have more purchasing power than ever and
parent’s credit card, parents can monitor usage and            credit card co mpanies are vying for their attention. If you’ve
prevent surprises since your teen cannot run up                taught your children good money management, you can drop
months of debt without your knowledge.                         them and their credit cards off at the dorm with peace of
                                                               mind. Now, if you could only teach them how to do their
     Although your student will be very tempted to             own laundry … .
get his or her own credit card, try to encourage
your student to use your credit card for at least the
first year of college until he or she can prove                Provided as a public service by the Community Bankers
financial responsibility. When he or she finally               Association of Illinois.
apply for a credit card, encourage him or her to
shop around for low fees and low rates. Caution
your child not to be taken in by “teaser rates” i.e.,
low rates that jump after a few months. The novice
card user needs to understand the consequences of
paying the balance — interest accrues until it is


      Contact: Co mmunity Bankers Association of Illinois, Co mmun ications Dept., (800) 736 -2224 or cbaico m@cbai.co m

								
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