Parents Need to Alert Teens to Credit Card Abuse

[Nov 13, 2007.]

 

This week came news that the discounter known as Dollar Tree would begin accepting VISA credit cards starting at the end of the month. The news is significant, given the fact that Dollar Tree boasts more than 3,300 stores nationwide.

The retailer already accepts Discover Network cards. Meanwhile, Mastercards are accepted at nearly 1,000 Dollar Tree stores.

Since Dollar Tree caters to those on a tight budget, you might expect young shoppers to take advantage of what the store has to offer. As a result, experts in the financial industry say it's more important than ever for parents to warn teens about the dangers of credit card abuse.

A number of stores try to entice shoppers with offers of discounts for applying for in-store credit cards. However, what many young consumers might not realize is that possessing too many revolving credit card accounts can have a negative impact on your overall credit score.

Interestingly enough, the fastest group of individuals filing for bankruptcy is those age 25 and younger. Many of those consumers are landing in deep debt because of credit cards. It is a fact of modern life that credit card companies attempt to target teens, even though they need a parent to co-sign in order to obtain a card. The average student is offered more than a half-dozen credit cards. Therefore, it should come as no surprise that the vast majority of college students have credit cards.

It is interesting to note that most teens learn money management techniques from their parents. As a result, if parents rely too heavily on plastic, teens are likely to follow suit. That's why it's more important than ever for parents to teach teens good money management techniques, especially when it comes to credit cards. A good rule of thumb is for parents to wait to make purchases until they actually have the money to pay for them.

Julie Ann Amos
November 13th 2007

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