Teach Your Kids How to Avoid Credit Card Sins
Having a great credit card score is today a crucial factor in any life-style. It is a means of saving money on a mortgage or an auto loan and you could even be recognized by financial institutions as someone to look after. However, should you suffer the temptations of wanting to buy and keep on buying, then you are running the risk of committing Credit Card Sins! What is more, instead of teaching your kids how to manage personal finance, you could be showing them how to get into serious debt.
There are signs that you should be aware of, and teaching your kids not to follow. Credit Card Sins are placed before us in many variations. The constant search for the latest fashions, or impulse buying of items you do not really need, are only two small examples. However, they could make you break any structured budget, such as mortgage or car payments. Teaching your kids to spend cash and not use plastic is a good start. Handing over a piece of plastic is not the same as taking cash money out of your purse or wallet. If you do not have the cash at that specific time; wait! It could surprise you how quickly you forget that item.
Falling for special discounts are excellent traps for those tempted by Credit Card Sins. If it relates to opening a new credit card, think carefully. Every application you make to a potential creditor could detract points from your credit score. Creditors determine that you are seeking greater debt responsibility. Include not opening more than one credit card after several months’ intervals, when teaching your kids personal finance management. Do not close your longest serving credit card, because this helps determine the term of a credit history and is a factor in your credit score.
Pride is a Credit Card Sin. If you have financial problems, discuss them with your creditors or seek qualified help. Teaching your kids this simple rule could save them much stress. This also applies to the common complaint of wanting a new car or other item, because another person has it.
Using the full amount of credit available is regarded as a Credit Card Sin. You could cast doubts to a potential creditor and damage your credit score, because of a significant debt to income ratio. Teaching you kids to keep their balance under 30% of credit available, is a good lesson to learn.
Pretending your credit report does not exist, is one of the Credit Card Sins. Teaching your kids to check regularly for any errors could save some money. There are sources available where you can check your credit report at no charge. Emotional upsets could lead to Credit Card Sins and inspire a spending spree that could be cause for regret. Teaching your kids financial self-control and awareness of emotional financial decisions, could prove a great asset in their future.