The American Bankers Association recognizes October 17 as Get Smart About Credit Day. The campaign’s goal is to work with high school students and young adults across the nation to help educate them on personal finance skills.
Statistics from youth.gov show exactly why financial literacy is imperative to young adults preparing to enter the marketplace:
· From 2004 to 2009, the median credit card debt among college students increased by 74%.
· Of 15-year-olds surveyed, 18% did not learn fundamental financial skills such as budgeting, comparison shopping or understanding an invoice.
The Consumer Financial Protection Bureau recommends education as the first step to improving financial literacy. This can start at home. Sit down with your teen and discuss the importance of a good credit score, and the ways a credit card can impact this.
Better Business Bureau serving the Heart of Texas recommends sharing these tips before your young adult opens their own credit card:
· Don’t overspend. Paying off your credit balance shows that you can manage your finances and that you are a suitable credit risk when buying a car or house. Remember, credit cards have high interest rates that accumulate from one month to the next.
· Monitor credit. Avoiding late or missed credit card payments as well as bank overdraft charges can help you maintain a healthy credit history. Checking your credit report is a good way to check for fraud and see the long-term effects of your credit habits.
· Shop safe online. Be sure to only make purchases from safe websites when shopping online. You’ll know a website is safe by the lock icon next to the URL. Entering your credit card information into unsafe websites puts you at risk for having that information stolen.
· Review statements. Reviewing your credit statements regularly can help you catch fraud on your credit card. Keep your bank and card issuer’s customer service numbers handy in case you need to report fraudulent charges.
To learn more, visit us at bbb.org. Resources for improving financial literacy can be found at youth.gov or at consumerfinance.gov, the official website for the Consumer Financial Protection Bureau.
ABOUT BBB®: For more than 100 years, the Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2018, people turned to BBB more than 173 million times for BBB Business Profiles on nearly 5.4 million businesses and Charity Reports on 11,000 charities, all available for free at bbb.org. The Council of Better Business Bureaus is the umbrella organization for the local, independent BBBs in the United States, Canada and Mexico, including BBB serving the Heart of Texas, which serves 105 counties and has offices in Austin, Bryan, Corpus Christi, Fort Worth, Midland, San Antonio and Waco.