One of the failings of our education system is that kids do not get taught about credit. Research shows that 40% of American adults do not understand the basics about credit. Worse, they believe false information about how credit works.
For example, many people believe that job status, income and age play a role in determining a credit score. If parents are not aware of the facts then we can't expect credit to be effectively taught in the home. As a result, this vital information to conducting personal financial affairs falls through the cracks.
A Solution To This Problem
Tonight I had an opportunity to help some teenagers get a basic understanding of credit and why they should care. I tweeted about it after the session and took a picture with the class which you can see below.
Intelligent Credit Questions
What really impressed me was the quantity and quality of questions that the youngsters had, some of which have inspired us to schedule additional topic sessions. For example, one teenager asked what would happen if someone used his name and social security number to apply for credit. This great question made us think to organize a future session dedicated to identity protection.
Credit vs Debit vs Prepaid Cards
Another hot topic was about different card types - credit cards vs. debit cards vs. prepaid cards. There was definitely confusion about distinguishing prepaid cards from traditional credit cards. It sounds like several of the kids (or their older sibling) had been issued prepaid cards by their parents and thought they had a credit card. Although this topic was not part of my canned presentation, we took time to try to explain this so the kids could understand better.
Establishing Financial Literacy Program
The leadership at the Quality of Life Center (commonly called "The Q"), including Larry Aguilar, Chief Operations Officer, should be commended for recognizing the need and opportunity to bring financial literacy education to their after school program. I have to give a lot of credit (no pun intended, but I'll take it!) to this attentive bunch who spent all day in school and then at their after school program at the Quality of Life Center in Fort Myers, Florida, still had the energy and willingness to pay attention to my talk.
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