As chief strategist/consumer education for Charles Schwab & Co. Inc., Schwab-Pomerantz is a leading advocate for individual investors. She speaks and writes extensively about personal finance issues and is a[…]
Question: What is the issue with credit card debt in America?
Carrie Schwab: It just becomes a way of life in our country [USA]. In fact credit cards weren’t even available about thirty years ago. You are right, we use it is a way to extend our income.
When I talk to families and to consumers at large, I am a big believer that we have to teach our young kids as teenagers, how do you use credit cards wisely. In other words, paying of in a monthly basis, understanding how fees and interest work.
Lots of people were not educated about this and what we are finding through our studies is that teenagers, 13 to18 years-old, already owe on average $300 to an individual or an institution. Even our young kids are using these credit cards.
Parents really need to work with them and make it the discipline that is paid of monthly and similar to teaching you can how to drive. You want them to do it under your roof, before they leave home and get in lot of trouble.