S.A.V.E.M.M. News

The New Credit Card Legislation which goes into effect next year will require a signature from a parent in the event a person under 21 applies for a credit card application.  Alumni groups criticize this practice, because teens and college students will not learn how to be financially responsible.

However, this may be a great opportunity for parents to teach their children how to monitor their expenses.  A parent is unlikely to allow the teen to rack up credit card charges if they are monitoring the expenses.  Parents could set up a time each month to review the account and discuss the spending habits with the teen or student.

If teens know that a parent is reviewing the account, they may curb their spending.  Having a parent assist the teen in knowing how to use money wisely could help them to avoid making costly mistakes in the future.  Many teens have signed up for credit cards without knowing all of the responsiblities involved and ended up in debt or filing for bankruptcy.  Banks did not make that clear in the past, but with the new credit card legislation, banks are required to make disclosures about the fees and penalties involved when payments are not made in a timely manner.