Organizations like the Jump$tart Coalition and NFCC have rolled out programs that help you teach your kids about the ins and outs of credit cards, credit ratings, interest rates, etc., but Janet Bodnar at Kiplinger says that there are some basic facts that you should focus on. She thinks too much detail bores a kid; we think it depends on the kid, but agree that at the very least, hitting each point on the following list would give your offspring a decent foundation for making good credit decisions.

• Credit cards are not free money
• The card issuer charges interest.
• Don’t max out your credit. “Hold your charges to 25% of your credit limit, or even less” if you want to max out your credit score.
• Pay your bills on time to avoid screwing up your credit rating.
• Blots on your credit record can affect your ability to get a job, rent an apartment, buy a car or get a cell phone, which is why the previous bullet point is so important.
• Pay your bill in full each month, if you can, and always pay more than the minimum.

Visit the full article for links to online tools and resources from Kiplinger that you can use to help illustrate your points.

“What Teens Need to Know About Credit” [Kiplinger]

RELATED
“Jumpstart’s Reality Check” [Jumpstart Coalition]
“College Credit for Life” DVD [National Foundation for Credit Counseling] (last item on page)
(Photo: Getty)

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.