The eighth annual poll of Teens and Personal Finance conducted by Junior Achievement Worldwide has found that today’s teenagers are already making some major mistakes when it comes to developing their financial habits.
The survey also found that the number of teens carrying credit cards is increasing. Among those teens that are ages 13 and 14, 2.7% have credit cards. Once the teens reach 15 and 16 years of age, the number with credit cards increases to 5.3% while 10.6% of 17 year olds have a credit card. By the time they reach 18 years of age, 28.8% have their own credit cards.
These figures shouldn’t come as too much of a surprise considering the fact that the average college freshman is already buried in $1,500 in debt on their credit cards. This figure is more than doubled by the time college students graduate.
If you aren’t bothered by the fact that so many teenagers are carrying plastic, you might be bothered by the way they are handling it. According to the poll, 2.4% of those with cards admit that they occasionally skip out on making their payments. Approximately 15% also make just the minimum monthly payment and some don’t help to pay the bill in anyway. Rather, 11.2% of them let their parents foot the monthly bill.
While I personally am not opposed to teens having credit cards, it is up to the parents to make sure they use them responsibly and that they serve as a learning tool. It sounds like some of these teens are only learning to build up a huge debt, to be irresponsible about repayment, and to depend upon others to get them out of debt. That isn’t quite the learning experience these teens should be getting.
As Gerald M. Czarnecki, who is president and chief executive of JA Worldwide, said, “We need to do a much better job of preparing our children to avoid the financial pitfalls that so many adults have faced by teaching our kids how to effectively manage their money.”
The Junior Achievement programs are working toward helping in this area. Some of the money management skills these programs are working with include teaching the teens how to create a budget as well as how to stick to it. In addition, the program is attempting to help educate teens regarding smart use of credit cards.
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