Credit Card Lessons For Teenagers (And Their Parents)
This is “America Saves Week”. In these tough economic times, more parents are looking for ways to teach their kids how to handle money.
I recently came across some research that shows how money attitudes are passed down between generations. If you’re good with money, chances are your kids will be. Unfortunately the opposite is also true.
So many parents get caught in the credit card trap, not knowing the real cost of a purchase when interest charges are added in. Here’s one great online money tool for kids that parents should check out.
An online credit card simulator is available for teenagers at ChannelOne.com. On the site you get approved for a virtual credit card, then take a shopping spree at an online mall, and learn about interest.
I gave it a try. I “bought” a laptop computer for $1400, but ended up paying nearly $1800 by making only the minimum $42 monthly payments. It also didn’t help that the very enticing low interest introductory rate jumped dramatically after only a few months.
It’s always an eye-opener to learn just how much something really costs when interest is tacked onto it. The credit card simulator is meant for kids, but it could also teach a lot of parents a thing or two about credit cards.