While watching In Debt We Trust with Nathan and Ryan, I found out that those who pay off their credit cards each month are called deadbeats by the credit card industry.  That makes me a deadbeat.  Deadbeats rule!

I’m not a big fan of the credit card industry.  Just because you can doesn’t mean you should.  Well the credit card companies did, and a lot of people are suffering.  And although a tad bit behind…change is a comin’.   Congress just passed new legislation.  No longer will credit card companies be allowed to change rates willey nilley like they’ve been doing. 

Don’t get me wrong.  I love my credit cards!  Last year I “earned” over $600 in cash just because I used them…and paid them off each month.  

But there is a dark side to credit cards.  And our kids need to know about it.  Remember, habits are formed when kids are young.  Bad habits are hard to break.  Let’s form the good ones.

Good habits:  saving, spending wisely, sharing, living within our means, setting personal financial goals, having a money game plan.  If we can instill these habits in our kids at an early age, they’ll have the skills to use credit cards wisely.

So here’s the low down:  A revolving credit card balance is really the same as a high interest loan.  If we can have kids agree how ridiculous it is to take out a loan on a Rise Against CD or a new pair of Ambercrombie and Fitch jeans, then we have a chance of preventing what has become an addiction in our young adults.  But won’t kids eventually need to use credit cards to begin establishing credit?  That was a question I got asked by one of the mom’s in my money class.  The answer.  No.

Remember in the olden days those green American Express cards…the ones you had to pay off each month?  They’re still around, we just don’t hear a lot about them.  Probably because they don’t generate enough money for the card companies. 

They’re called charge cards and they’re the way to go for young adults and perhaps many adults.  They don’t allow revolving credit.  Ya don’t pay the entire balance at the end of the month, ya can’t use the card.  Well, you can try, but it’ll be closed for repairs.

There is usually an annual fee associated with charge cards but for a young adult who is learning the ways of the charging world, it’s a small price to pay.  And the fee for the green AmEx card is only $25/year.

Now how about someone like me who pays off my credit cards each month and loves getting free money because of it?  You know your child.  If you feel he/she can responsibly pay off the card each month, then, when they’re old enough, have at the freebies.  It’s like being a savvy consumer.  But it requires discipline.

You know what’s one of the best things about being a kid?  They’re starting with a clean money slate.  How many under-15-year-olds do you know who are in credit card debt?  Probably none.  My goal is to keep it that way.  Let’s help them establish healthy money habits and raise a generation of deadbeats!