Teens are fastest growing group of bankruptcy filers

April 25, 2006

Teens are fastest growing group of bankruptcy filers
www.news14.com

4/24/2006 10:54:45 AM
By: Ilin Chen & Web Staff

(FAYETTEVILLE) -- Teenagers pump billions of dollars into the nation's economy and some do it with plastic instead of cash.
At the same time, young people are also the fastest growing group of bankruptcy filers.
Samantha Mitchell, 15, doesn't have a credit card but she knows what she'd buy if she did.
"Probably clothes,î she said.
A recent poll shows one out of every ten teenagers has a credit card and that same poll shows as teens grow older, the percentage that owns a credit card also increases.
But no matter the age, credit counselors encourage parents to teach their kids financial responsibility.
Research shows most teens pay off their monthly balances in full, but for the 15 percent who make only the minimum payment, that means a head start on accruing debt.
"Some of the biggest challenges that we have is the bankruptcy filings in the last couple of years, over 19 percent of them are from college students,î said financial counselor Esther Acker.
That's why Samantha's mom wants to wait until she's older before giving her a card.
"We'll definitely sit down with her and tell her what her set amount is per month, let her know what she can spend, let her know to keep track of it in a little book,î Michelle Mitchell added.
Experts say debit cards are also a good way to go because you can't spend more than you have in the bank.
"It's helping me not spend like other teenagers who spend it on clothes and everything like that,î added debit card owner Courtney Chatelain. ìI just spend it on emergency things."
For some teens, debit, is the only way to go.
ìI think having a credit card is just asking to get into trouble, into debt so I don't even want to go there,î said debit card owner Chasity Rash.
If you're thinking about giving your child a card, experts say it's a good idea to have them track their income and expenses for a few months to figure out what their budget is. Financial counselors also advise paying the full amount charged on a credit card each month.
For more information about teens and credit cards, visit this website.