• Theresa Gray

Understand how credit cards can be a curse to your kids

Our society doesn’t hate debt - but it should. If not for our own sake as adults, then we should for the sake of our children.

Kids are growing up completely immersed in marketing. It is pervasive on every website, embedded in movies and television, not to mention all the paid commercials!

Our kids are also learning from an Amazon culture how easy it is to get what you want, when you want, with just ‘one click’. You don’t even have to leave the house!

As long as you have your credit card on file, it’s ridiculously easy to shop.

And, to go into debt.

Debt is like Pinocchio’s pleasure island - a curse to the unsuspecting.


Do you remember that Disney movie? Pinocchio is an innocent new creation who ventures out into the world, but is unprepared for what he finds. He gets taken advantage of repeatedly, because he doesn’t know right from wrong. Pinocchio does have a little cricket to help give him advice, but he does’t always listen to Jiminy.

I see a parallel of our financial lives with this movie.

Compare a college age kid to Pinocchio.

Kids get out of high school and are targeted to get a credit card.

They’re offered points for flights or other perks to sign up for a credit card.

They’re told that to get a good credit rating they need to get a credit card now, charge some stuff and pay it off slowly.

They’re told that you need to build up a FICO score so that later you will be able to get a good rate on a home loan or an auto loan and it will save you money in the long run. But more immediately, your credit is key to renting an apartment, signing up for insurance, borrowing money for college costs, buying a cell phone, or signing up for certain services or utilities.

It’s true.

A higher FICO score can give you a better rate.

But, it is also true that people with credit cards often spend more than they can afford to pay.

And, they often end up carrying a balance on their credit card and having to pay interest on their debt.

It’s my opinion that everyone has heard the warnings about credit cards and debt. There’s plenty of Jiminy-Cricket-like voices out there chirping, “don’t go into debt, don’t go into debt”, but they are easy to ignore because that’s not helpful advice!

It’s too vague. And, often too late!

I’ve spoken to hundreds of people who tell me that they were never taught basic personal finance. Ironically, most of these were college graduates and several were finance majors! They learn complicated compound interest calculations and return on investment stuff but nothing about setting a budget and living within your means.

Here is a great chart from Next Gen Personal Finance and Visual Capitalist showing the results of a U.S. High School financial literacy study.

Next Gen Personal Finance chart

The main conclusions of the study were:

  • Only 16.4% of U.S. students are required to take a personal finance course to graduate high school.

  • Five states do have a personal finance requirement: Alabama, Missouri, Tennessee, Utah and Virginia.

  • But outside of these states, the proportion of students with a personal finance requirement drops to 8.6%.

  • Meanwhile, only 5.5% of low income schools (outside of mandate states) have personal finance as a requirement.


An even more direct assessment of how our children have learned bad habits from us is addressed in this alarming article: “Our children have watched our borrowing habits, and now they’re loading up on debt”.

In summary: Generation Z (kids under 24) are building debt already, with a debt balance of $6,871. And, that debt is growing 18.6% faster than the nation-wide average.

I doubt that those Generation Z kids signed up for a credit card knowing that they would soon be trying to pay back their purchases plus interest!

At the average ‘good’ rate for credit cards (19%) it would take a monthly payment of $633.21 to pay off this bill in one year. And, that’s if there are no more charges!

Credit card companies aren’t in business to be nice, or to educate you, or even to secure your financial future.

They make a lot of money on interest and on late fees.

They aren’t going to lose money.

If they offer a gift on sign up or reward points it’s because they know that they will make money on you someplace else.

When it comes to personal finance it’s best to avoid debt.

Pinocchio’s Pleasure island was an amusement park with the goal of turning mischievous young boys into donkeys which were later sold into slavery. While on the islands the boys were encouraged to do anything they wanted. It was a trap. Once the boys had spent enough time indulging themselves, they would eventually turn onto donkeys.


"Right here, boys! Right here!

Get your cake, pie, dill pickles, and ice cream!

Eat all you can! Be a glutton! Stuff yourselves!

It's all free, boys!

It's all free!

Hurry, hurry, hurry, hurry!”

- Pleasure Island announcer


It’s not really free.


“When you get in debt you become a slave.” - Andrew Jackson

“A man in debt is so far a slave.” - Ralph Waldo Emerson

“Debt is dumb. Cash is king.” - Dave Ramsey

“The borrower is slave to the lender.” - Proverbs 22:7


Teach your kids about finance!

Teach them by showing them that you are in control of your finances.

Make a budget. Spend less than you make. Pay off your debts. Spend time being grateful for what you have. Keep a gratitude journal.

There are many resources to help you learn how to make a budget and to ‘tweak’ your attitude - both free and for a fee. Here is a list of resources to check out online, at the library or on Amazon.

Website: Wealth 101 - A crash course in personal finance

Website: Next Gen Personal Finance

Financial coaching is also available for one one one personalized attention. Contact me at Theresa@MoneyMatters.Life or visit the other great coaches at Best Money Coaches.

#FPU #stoplivingpaychecktopaycheck #creditcards #financialwellness

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