Educating your child on the risks and dangers of credit cards is one of the most important lessons you can teach them at an early age. With credit card companies making teenagers their #1 target, let's look at some startling statistics:

· 11% of teens ages 12-19 have their own credit cards, and an additional 10 percent have access to a parent's credit card. (Teenage Research Unlimited)

· 33% of three high school seniors uses credit cards and half of those cards have their own names (A survey conducted by the Jump$tart Coalition)

· 45% of college students are in credit card debt with the average credit card debt balance being greater than $3,000. (Jump$tart Coalition,2005)

· More students leave college because of credit card debt than to academic reasons (Utah Mentor, 2003).

· Over 20% of 18 and 19 year olds have credit cards (Junior Achievement, 2005).

· The number of 18 to 24 year olds declaring bankruptcy has increased 96% in 10 years (Richmond Care Program).

· 19% of the people who filed for bankruptcy last year were college students (American Bankruptcy Institute).

· The average college student gets 25 to 50 credit card solicitations a semester. (2006 statistics by the United College Marketing Service, an Oak Brook, Ill., firm that runs financial education seminars with credit-card firms as sponsors); And

· 400 Ohio State students were surveyed in 2002 on how they would respond if overwhelmed by credit card debt. 82 percent predicted stress; 75 percent depression; 34 percent said they probably would use drugs or alcohol; 27 percent said they would steal to get what they needed and The Most Alarming Statistic of ALL- Nearly 22 percent said they would consider suicide.

Now if you think the suicide statistic is unrealistic, consider that in 1997, two Oklahoma students, Sean Moyer and Mitzi Pool took their lives. Moyer, a junior at the University of Oklahoma, had 12 credit cards and had accumulated

$10,000 of debt. Mitzi Pool, a freshman at the University of Central Oklahoma and only 18 years old at the time, had accumulated $2,500 of debt. Moyer actually continued to receive credit card offers in the mail after his death.

Both students died from hanging themselves.

WHY ARE CREDIT CARD COMPANIES TARGETING TEENS?

There are several reasons:

A) Vulnerability-Teens are the most vulnerable and profitable. They spend in excess of their means. They spend on fast food, movies, clothes and music. All together, they spend a whopping $141 billion a year.

B) Loyalty-Young consumers will remain loyal to their first cards. Lenders know this and aggressively market to teens to become their first credit card. Becoming their first credit card can ultimately lead to a customer for life.

C) Easy Barrier of Entry- This means it's easy to get in front of teens. Nearly every major university in the country has a huge financial deal with a credit card company. This can mean as much as $20 million. This is a major source of revenue to universities, especially state universities who are receiving less and less financial support from their state. And the worst part is that the worse the card terms are for students, the more money the school receives.

HOW DO THEY DO IT?

Here's how they get our children to purchase credit cards:

A. Mailings-The most obvious. However, what's interesting is how they obtain personal information. Banks and credit card companies will actually give money to the alumni associations in return for receiving data on students.

B. Off campus promotions-This is where marketers will lure a student off the college campus and offer free items to attend and fill out applications. These free items could be t-shirts, free coupons, blankets or IPods.

C. Branded Cards-This is where the credit card is branded with the school's logo making it very attractive and a source of pride for a student to carry.

WHY ARE OUR CHILDREN SO AT RISK AND VULNERABLE?

Because we are not properly educating them!!

Our children are vulnerable to debt because they don't know how credit works.

And here are some very telling stats that illustrate how our children are illiterate when it comes to financial literacy education.

Thirty percent of youth report that their parents rarely or never discuss saving and investing with them. Forty-seven percent say their parents rarely or never discuss household budgeting with them. (Youth and Money Survey, 1999)

Sixty-one percent of parents say that parents and schools should share the responsibility for teaching children about financial education. (Parents, Youth and Money Survey, 2001)

Only 21 percent of students between the ages of 16 and 22 say they have taken a personal finance course through school. (Youth and Money Survey, 1999)

Ninety-four percent of youth cite their parents as the primary source of financial education. (Youth and Money Survey, 1999) If 94 % of our children believe that our parents are the primary source for their financial education and 47% percent say that their parents rarely or never discuss financial education with them, you now have a recipe for disaster. And that's not fair to our children!! It's our responsibility to protect and educate them.

So, how do we do that?

THE SOLUTION TO HELP AND PROTECT YOUR CHILDREN

Start Their Financial Education Early-The key to protect your children is to begin laying the groundwork at a young age. The habits children form today will be the tools they use tomorrow.

1) Ages 4-5-Begin as early as possible. This is the foundation for building the right habits and at this age, children will buy into anything you tell them. Begin by teaching them how to save and set aside money. Offer them a small allowance and tell them to set it aside in a piggy bank. Make sure you explain to them that they can't spend more than what they just brought in.

2) Ages 6-9:

A) Begin by giving the kids an allowance with a carefully planned program to illustrate the importance of budgeting and cash flow. They should understand the importance of setting money aside to use later for expenses such as college education and their retirement.

B) Open up their own bank account. Explain to them the importance of personal information and the dangers of identity theft. Begin explaining the importance of protecting your social security number and bank account information. Make sure they know to never place outgoing mail in the mailbox for the postman to pick up and the importance of shredding documents with your personal information as opposed to throwing away in the trash.

C) Start including them in discussions of household finances, budgeting and how your paycheck pays for things such as your mortgage, education, food and clothing.

D) Begin discussing the importance of investing.

E) The gift of giving-. Have them set aside 10% for charitable purposes. Giving back to society and becoming philanthropic is crucial to becoming a world class leader.

F) Explain to them the importance of hard work and that nothing comes free.

3) Ages9-12:

A) Now they should be ready for their first job to earn their own money. Examples could include washing the neighbor's car, raking leaves, shoveling snow, blowing leaves, etc. Obviously, it's very important to keep an eye on them given the dangers in today's world. However, have them approach the neighbor's house to ask for the job and give them a price. This will teach them to be independent and build their confidence to be a self-starter.

B) They are ready to learn about credit cards and debt. Explain to them what a credit card is and the various terms. Make sure they understand that once they buy an item with a credit card, they will receive a bill soon thereafter. Also explain why it is important to pay on time and how interest rates work.

C) Prepare them for the onslaught of banks and financial institutions sending them credit card applications.

D) If your children have earned income, consider opening a mutual fund or some type of investment vehicle.

4) Ages 13-19:

A) Begin speaking the language of entrepreneurship and leadership. Have them create their own company. This is one of the most valuable tools you can give to your kids. First, they will stand out and shine when they interview with a university or college. Second, it will allow them to fall back to something in case they don't go to college, they aren't offered a job out of college or they may just want to be their own boss. Also, make sure they know that 60% of all millionaires are entrepreneurs.

B) Talk about credit card responsibility and some of the tactics that banks and lending institutions will use to solicit them for credit once they go to college.

C) Make sure they understand the debt trap and how compound interest can make it very difficult to ever catch up and payoff your bills in full.

D) After having their own checking account, I recommend starting with an ATM card before they receive their first credit card. (I do not believe they should own a credit card until going off to college.)

E) Once they have their own credit card, set a limit to be used only for emergencies.

And always remember this-Your Children Are Never Too Young for Success!!!!!!

About the Author

Mark Luterman is the President and Founder of The Make Your Kids Rich System, http://www.makeyourkidsrich.com which, teaches children how to become world class entrepreneurs and leaders and creates a process for parents and children to work and spend quality time together. Mark's vision for this company evolved from his own personal successes as an entrepreneur and his passion to help kids succeed at at an early age.