Clearly, credit card debt is a problem. In the last 12 months, 15 percent of American adults, or nearly 34 million people, have been late making a credit card payment and 8 percent (18 million people) have missed a payment entirely. Americans carry approximately 832 billion dollars in credit card debt and that number is expected to grow to a projected 1,091 billion dollars by the year 2010. As we all know by now, late and/or missed payments are crippling.

The next generation is preparing to end up in the same hole. College students receive 25-50 credit card solicitations per semester. As a result, 76% of undergraduates have credit cards with an average balance of $2,200. When asked, 50.8% of college-age adults agree with this statement: “I have experienced repeated, unsuccessful attempts to control, cut back or stop excessive money use.” And finally, university administrators report losing more students to credit card debt than to academic failure.

Education, lessons to help our children learn about the proper use of money, how to set goals for the choices they have for money and ultimately, how to exercise and strengthen the muscle of delayed gratification are critically important to helping them survive and thrive as young adults. Teaching children how to handle credit and take personal responsibility for credit card debt is one of the best ways to curb abuse and avoid the train wreck.

As parents, we have a virtual arsenal of tools that we can use to help our kids walk away from the barrage of credit card solicitations. Teach them young about money choices, show them how to set a goal for something they want or need, give them allowance that covers expenses in their lives and let them manage the dollars. A child is always willing to spend our money — not so much when it comes to spending their own. Allowance gives them a chance to learn.

One new tool in the marketplace,, is an alternative payment method that says it puts teens in charge, but lets parent have control. Unfortunately this site doesn’t teach kids a thing about responsible money management. The site allows kids to shop and parents to approve (completing the transaction with the parent’s credit) or deny their requests. Your kids are encouraged to shop for what they want and let you know via email what it is that they want. When you give your permission for the purchase, the site accesses your credit card for payment. In fact, your child can ask anyone they want — the site suggests to them that they send their requests to grandparents, aunts, uncles and so on.

Well, this is just silly. This does not teach our kids a darn thing, except to be solely focused on getting what they want when they want it without any delay or any work on their part. The site claims that this will make our lives as their parents easier. Really? Is anyone buying that?

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Written by Susan Beacham
Susan Beacham founded Money Savvy Generation in 1999 after almost two decades in private banking and investment management complemented by considerable time teaching at the elementary level.

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