This post is brought to you by a compensated campaign in collaboration with Latina Bloggers Connect and WellsFargo but all thoughts and content about how to teach kids about credit card responsibility are my own.
I grew up poor. There were 6 children, my mom stayed at home and my dad worked as a forklift driver at the local glass factory. We were a 100% blue-collar family. Money was always tight but my parents did what they could, with what they had. Everything was paid in cash and if we didn’t have the cash, we just didn’t get it and we saved until we did or we decided it really wasn’t that important. I hated this way of life. Being poor is not anything anyone would choose.
In high school, I got two jobs so that I could have the things that other kids had like named brand clothes, shoes, a television and radio in my room. I could finally afford to “hang out” with my friends and use the car because I could afford gas and admission into the movies, roller rink or at the mall.
It was difficult being 17 with 2 jobs but I learned the importance of hard work and saving. I learned the value of money, even if it was a hard lesson learned. I bought what I could afford and I learned to have very discerning taste and appreciated and took care of those things. I had a solid financial foundation.
Then I went away to university, this is where everything went horribly wrong, and suddenly there were banking institutions all over the quad offering me free t-shirts and pre-approved credit cards, or as I thought of it in my 18-year-old mind “free money”. I couldn’t help myself, I took every free t-shirt and credit card they offered me and without my parents there to remind me just how blue collar I really was, I just kept spending. Having credit felt like freedom from my blue-collar existence but I had no idea that I was trading my financial restrictions for full-on slavery.
Did I mention I was at university only by the grace of academic scholarships and financial aid? I wasn’t supposed to work in college. I was supposed to focus on my studies so that I could become something better. I had no business having any credit cards, never mind several and what kind of Bozo gives credit cards to unemployed children, anyway? Who could afford the crazy interest rates in the fine print that no one bothered to mention to me? So there I was, 18 with all the credit cards and no way to pay them back and interest building up daily. I felt like I was suffocating. I wish someone has talked to me about money.
It wasn’t like I could ask my parents for help. They never had credit cards and I was pretty sure that they’d be disappointed that I had racked up thousands of dollars in debt just trying to be cool. To be honest, I was embarrassed but I couldn’t just keep avoiding my responsibilities. I had to get a job again to pay my bills. I wish I had someone sit down with me and teach me how to use credit and explain all the responsibilities that came with it rather than handed me a credit card app while they tossed me a t-shirt. I felt duped.
Here are some credit tips from Wells Fargo that I wish I had when I was getting my first credit cards.
- Check your credit report annually
Make sure your credit report contains current and accurate information. Errors will negatively impact your credit score. Request a free copy of your credit report at least once a year from AnnualCreditReport.com or call toll-free 1-877-322-8228.
- Pay your bills on time
Your payment history is one of the biggest factors in your credit score – including things that may surprise you like on-time payment of your rent and cell phone bill.
- Pay more than the minimum
Paying more than what’s due on your credit card helps you pay down debt faster and can improve your credit score.
- Keep debt at no more than 35 percent of your gross monthly income
Lenders look at the amount of debt a consumer has compared to their monthly income when making credit decisions.
- Contact your lenders
If you ever have trouble paying a credit account, contact the lender rather than simply not paying.
- Think before closing accounts
Closing credit card accounts may lower your available credit and hurt your credit score.
Wells Fargo has a full list of helpful credit tips and money managing tips that are perfect to share with your teenager or anyone who might benefit from some financial guidance. Can’t we all?
Wells Fargo is committed to making financial education and in-language resources available to Latino consumers. That includes providing customers with bilingual online tools, Spanish Text Banking, Spanish account statements, Spanish-language call centers, Spanish-speaking bankers in stores across the nation and more.
As part of that commitment and in order to connect with the Hispanic community in a meaningful way, Wells Fargo recently collaborated with Telemundo for the “Conversemos de Tus Finanzas” campaign. The campaign is focused on empowering Hispanics to enhance their financial knowledge and help them to reach their financial goals. The campaign provides customized content, tools and resources around the important financial topics of money management and credit.
I wish they had this when I was 18 but I’m sure glad they have it now and these kinds of invaluable resources will be available to my girls when they get older. Plus, the silver lining, they get the benefit of learning from my credit mistakes.