What does someone between the ages of 14 and 25 think of when they hear the term, credit card? If my 6 year old daughter is a proxy, then they hear “just hand them this card and they give you back the toys/food/adventure you want.” Far too often, I’m not sure my 6 year old daughter’s definition of a credit card is far off that of a 14-25 year old. Unfortunately, most parents do not take the time to properly explain the concept of credit, and more importantly, the difference between credit and debt. FYI: Credit is fun, as it is the tool that allowed us to buy our desired thing. Debt is not fun, as it requires the hard work of paying for the thing that many times, does not seem as desirous once payment is required.
Anyone can obtain a small amount of credit, but only fiscally sound folks can build credit to become a tool to be used to achieve long-term success. If nothing more, our kids should be taught that a credit card is just a technology tool that converts credit to debt (i.e. fun to not-so-fun). Visual Capitalist put this great infographic out from their Wealth101 series and I would strongly encourage you to view it, pass it along to your kids or grandkids, then discuss it with them. If you talk to your kids about money, and share your successes and failures with them, that will give them the best lessons to learn from.
This type of basic financial education is not being taught. Just like the birds and the bees were your responsibility, so to is the conversation about credit and debt, and frankly, a far less awkward experience.