Teens, Credit Card Debt and the Truth

We've all seen the commercials for credit card companies: Well meaning parents give a credit card to a college student for "emergencies," and either while showing up for an impromptu visit or getting a heart-stopping bill find out the card has been "maxed out."

While shopping, at church and eating in fast-food places I have heard children and teenagers ask, plead for and beg their parents for credit cards. "I'll only use it in an emergency!" yeah. Seldom have I heard a parent ask the interesting question: "Exactly what do you consider an 'emergency?'" The answer might come as a surprise.

A few years ago I did a survey of teens in my church, then sat down with their parents with the results. These folks were getting hit with the "I need a credit card" petition. Amazingly, the top answers were not: paying for a tow when the car breaks down, an emergency gas-tank fill up, missing the last bus and needing a taxi or anything an adult would choose. The top answers turned out to be: dinner at the mall perhaps including friends, clothes, food delivery for parties and other non-emergency items.

I wondered who these teens were. I thought I knew them, having watched them grow up from birth. Did some metamorphosis take place and turn them into different people? I thought they had sense.

Speaking with them and their parents, one theme presented itself: the perception of credit cards as opposed to reality. Small wonder. Media ads everywhere give the impression anything can be had by using plastic. And had now. No mention is made of the reality that shows up in a month: the bill. No matter, the payment is miniscule, just make that.

Using one parent's credit card bill, I pointed out the credit limit- a high figure- $1,500. Some of the teens cheered. But wait-there's more. Moving down the bill, the monthly payment was only $45 a month. Teens cheered. But wait-there's more. Continuing down the bill, I pointed out the principal (the amount actually applied to the whole balance due) being paid was a paltry $9.52 on a balance of $1,257.85. No one cheered.