Overview of Step 5 - Credit and Debt

Young people, barely out of their teens are racking up thousands of dollars in credit card debt that they can not pay off. Compiled with student loan debt, the burden of being in the red is often more than they can bear and bankruptcy seems as if it is the only choice. In fact ,almost 10% of bankruptcy filings come from young adults age 18-25. It comes as no surprise, since their parents, and Americans in general, have a tough time saying NO to buying on credit.

• Federal figures from December 2005 that American's are carrying $2.1 trillion in debt.
• The average household has about 10 credit cards and $9,000 in debt, excluding mortgages.
• Only 16% consumers monthly balance is paid off by the end of the month.
• As of 2006, consumers are now required to pay a minimum of 4% of the balance instead of 2% from previous years.
• It is not unusual to see one's credit card interest rate raise to 30% with just 2 missed payments.

Over one billion solicitations are sent out every year to try to lure you to use a credit card. In order to survive the onslaught of promising invitations of credit, you and your child must learn the fundamentals of credit card management and the risks you both face by irresponsible actions.

In This Step:

• Terms
• Teaching Teens About Credit Cards
• Managing Debt
• Identity Theft
• Learning Milestone

Page 1 of 6: Managing Credit and Debt

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