Schwab MoneyWise : Financial Basics : Credit and Debt

Financial Basics

Financial Glossary

Credit and Debt

Did you know that one-third of all bankruptcies are filed by people age 24–35?* In fact, most bankruptcies are caused not by a major financial setback, but rather by a mounting series of relatively small purchases. The earlier we teach our kids about debt, the less likely they’ll become part of the negative statistics.

These days, you and your kids are probably inundated with credit card applications in the mail. Credit card misuse is a leading cause of debt among college students, and yet credit cards are virtually a necessity in today’s world. So the answer is not to avoid them, but rather to learn how to use them responsibly. And the earlier, the better.

*Source: “Generation Broke,” a 2004 report by DEMOS, a nonpartisan public policy organization.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of savings and investment strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction or strategy for his or her own particular situation. The examples mentioned are for informational purposes only and are not intended to represent results you should expect in the future. Data contained here is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.