Sikeston students learn lesson on credit

SIKESTON -- As the U.S. economy continues to recover, the American Bankers' Association has designated today as "Get Smart About Credit Day" to stress the fundamentals of wise credit use.

Financial Fitness Services in Sikeston is using the day to launch a campaign to put "Credit Card Smarts" calculators in area schools to be used as teaching tools in the personal financial management classes, the Sikeston Standard Democrat reported.

"High school seniors are getting ready to go out and be bombarded with credit card offers," said Donna Taylor, president of Financial Fitness Services. "I want these young people to see what kind of commitment they're making if they decide to use credit."

Taylor said she's had some Credit Card Smart calculators in her office for awhile and with today's Missouri graduating high school seniors having to have a semester of a personal financial management course, she thought it would be a good idea to put the calculators in the local classrooms.

"The calculator shows how much your payment amount would be on a given amount of debt, how many years it would take to pay the debt off and how much interest you would pay at different payment levels," Taylor said.

Because Financial Fitness doesn't purchase items on credit, money will have to be raised to buy enough calculators for schools throughout the region, Taylor said. Several local banks have offered assistance with the campaign, she said.

"I have started contacting teachers," Taylor said. "I wanted to make sure they would want them. I plan to order 1,000 of them as soon as I can do that."

Thresia Brinkley said her personal finance class at Sikeston Career and Technology Center talks about credit beginning with the first day of school.

"I don't think the kids realize the cost of credit -- how much money they lose when they charge something," Brinkley said.

Both Brinkley and Angela Rash, who also teaches the personal finance course at Sikeston High School, said they're excited about getting the calculators to use in their classrooms.

"I believe the calculators will help the students because a lot of them struggle in math," Rash said. "Even though they can do math on a simple calculator, it takes a few more steps. Sometimes kids get a little more lost."

Sikeston High School juniors Sam Polivick and Taylor Barnett said they look forward to using the Credit Card Smart Calculators and currently like the personal finance course they're taking this semester.

"It's stuff I definitely need to know," Polivick said. "I know I probably wouldn't have taken it if it wasn't required."

Barnett said he agreed.

"It has taught me a lot of things about finances," he said.

More than 54 percent of college freshmen have a credit card and 92 percent of sophomores have one, reported Nellie Mae, a federal student loan program.

Taylor said statistics show the average debt for 18- to 34-year-olds is $9,111.

"And even if you just put $1,000 on your card and pay the minimum, it will take eight years to pay it off," Taylor said.

Fortunately, there are safeguards to help consumers of all ages with credit card issues, Taylor said.

For example, the Credit Card Accountability Responsibility and Disclosure Act of 2009, effective February 2010, will require consumers under 21 to have a co-signer or prove they have the financial means to repay the loan.

In July 2010, credit card companies will be required to send with statements how long it will take to pay off the debt and the interest amounts associated with that debt, Taylor said. Plus, the length of time borrowers have to pay a balance is stretched out another seven to 10 days.

Taylor said consumers who use credit should be aware of the cost and realize that plastic is not money. She encouraged consumers to track their spending and categorize purchases.

"Overspending puts us in the place where we feel like we have to use that credit card to round out those monthly expenses, and before we know it, there's a deep hole," Taylor said.

Donations for the Credit Card Smart Calculators campaign may be mailed to: Financial Fitness Services, 1226 Linn St., Suite C, Sikeston, MO 63801. For more information, call (573) 471-9737.