It is almost impossible to survive in the modern world without credit. Because you need credit for so many various things. For example, without credit, you would find it just about impossible to rent a car. And, if you wanted to check into a hotel, just about the first thing that they will want to see is your credit card. And without credit, you can pretty much forget about buying a home unless you have the funds to pay in cash.
No one can deny that credit has been one of the most important factors responsible for the thriving in our economy. So much so that it has enabled many citizens to live a life that they could only dream of without credit. The problem is that Americans are so extended when it comes to credit that millions are teetering on the edge of bankruptcy.
A half century ago, it was hard to get credit. If someone saw a living room or dining room set in the department store that they wanted to have, they had a couple of ways of going about getting it. Either they could save up their paycheck money, deposit it in their bank account, and wait until it accumulated to a large enough sum where they could pay cash for the furniture. Or, they could purchase the furniture set on lay-away.
Lay-away is one of those terms that you never hear about these days. In the 'old days', it meant that the department store would 'reserve' the living room set, in their inventory warehouse. And, every week or month, you would pay them a portion of what it cost. After you had paid the full cost, the furniture was yours and you could take it home owing nothing.
The kids that have become teenagers today, however, have pretty much grown up with credit all around them. From the time they were babies, they have watched the adults around them, their older siblings, and other people purchasing all sorts of items using a plastic card. As a result, there is a disconnect between associating the money earned from a job with the credit card used to pay for that new xBox or video game.
In fact, by the time most students enter college they begin to receive applications for credit cards even though they have had very little or zero experience in the actually handling of credit. And when the students actually start to charge for items using their credit card, they are often astonished at the speed with which their finances quickly get out of whack.
If we want to preserve our children's futures, we have to teach them about credit. We have to teach them how to use it responsibly and how to prevent misuse of it from ruining their lives. And, the time to teach them is long before they get their first credit card. Because, once they become overburdened with debt, it is probably too late. And, these days, with jobs becoming scarcer by the moment, it becomes critically important for everyone to take control of their finances as quickly as they can.
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