Why are kids graduating high school with no idea how our banking and credit system works?  They are taught quadratic equations and a whole host of other shit they will undoubtedly never use, so why not spend time teaching them things they will need come graduation?

They need to understand that banks and financial companies will target them for credit cards and accounts they do not need.  It is fact that 18 year olds these days can rack up 5 cards in their first 6 months after graduation based on the banks’ marketing schemes.  Their hope is to make these new adults life long customers of credit to keep the gravy train moving.

In one, just one example, they will be given let’s say $2,000 of credit to purchase whatever they feel they want.  They will be informed that they can purchase up to $2,000 of items they want and only to have to pay $80 per month to pay it off.  What’s not to love in that situation they will ask themselves.  They will not think about the fact that of the $80 in payments per month, only about half of it or $40  will go toward the $2,000 principal the first 6 months.

If they are lucky, their parents will have taught them, but if their parents were anything like mine …. The bills were simply none of my business and I damn well should have known better than to pry …. They will not be given even the basics of credit.

So, if they pay just the minimum monthly payments it could take them over 8 years to pay off the $2,000 loan.  Most adults reading this probably know this dynamic but I challenge you to think about the monthly interest that each month is going straight to the bank’s bottom line.

In this example over the course of 8 years, the $2,000 worth of merchandise or vacation travel or God forbid groceries, will cost $1,160 in additional expenses.  What a bargain heh, getting $2,000 worth of goodies and only paying $3,160 for the, NOT!

Don’t just take my word for it, check out BankRate for the calculator.


Now multiply that by 5, and you get an 18 year old who is now $10,000 in credit card debt, he is now straddled with 8 years of $400 minimum monthly payments, and he will end up paying a whopping $15,800 for $10,000 worth of goods and services.

Think about that next time you visit a sale at a store and use a credit card you can only pay the minimum payment on to pay for those sale items.  There really is no sale is there?