In a post published this past July, we discussed a program in Tennessee known as the $mart Tennessee Financial Literacy program, which teaches students financial literacy. Continuing in that same vein, in today’s I would like to discuss the importance of teaching young adults to manage credit.

Along with cell phones and personal computers, the age of people using credit cards is getting younger and younger. What used to be considered to be only used by adults, credit cards are now regularly used by many young adults/teenagers.

Studies show that 32% of high school seniors use a credit card. And college freshman are offered an average of 8 credit cards during their first week of school. However, with 60% of students maxing out their credit cards within their first year of college, young adults are obviously not being taught how to responsibly use a credit card or the importance of their credit score. This can have devastating effects, as even some young people end up having to file for bankruptcy in some occasions. Fortunately, as of February 2010, Congress passed the Credit Cardholder’s Bill of Rights, which has limited the amount that credit card companies can advertise to young people.

Numerous college students are forced to drop out of school due to credit card related financial issues that could have been prevented with proper credit-education. The CARE Program, which stands for Credit Abuse Resistance Education, provides financial education presentations to students. With the constant messages of excessive consumption and material pleasures, it can be difficult for young adults to fight the temptations of overspending and abusing credit. CARE interjects to teach the consequences of irresponsible spending, such as bankruptcy, dropping out of school, higher interest rates, and other serious financial problems that can occur down the line as a result of misuse of credit.

CARE has put together a video that you can watch here: (http://www.careprogram.us/video-taking-control-of-your/ )

The video is aimed to teach students about the dangers of credit cards and covers the basics of credit, debt, savings, and the importance of making a budget. The video also provides important information for adults as well, and I recommend people of all ages to watch it, especially if you are experiencing personal financial troubles or are considering bankruptcy. It is never to early or late to learn about responsible spending and how to use credit cards wisely. As you know, credit counseling is a requirement of bankruptcy, so perhaps familiarizing yourself with how to make wise financial choices is your first step in getting back on your feet financially.