endless....there's no explaining what financial path today's young indebted people wish to take, but it does make sense to borrow on a relatively low-interest home equity loan to pay off very-high-interest credit card debt. The problem is, most indebted people don't know this or don't do this, because they don't understand money-management. Credit card interest is a killer, and too many people just think it's nothing to be concerned about. I agree with Greenie.
Interesting article published today in Wash Post about college students overloaded with credit card debt. I find this very sad. The only way I've found to control it is to keep my two kids on a tight credit-card rein and to use the card that we, the parents, also use, so we see the monthly statements.
Older son, just in the past couple days, got approved for his own credit card--he previously was using ours for extreme expenses, such as car repairs on the car we gave him. He has been working two jobs for a while (one a professional-type job and the other a side job at Home Depot to make extra money), so he qualifies for his own card. We used a little pressure to cut him off from continuing to use ours a while ago. The process was gradual, but I think he will now be on his own without going nuts on credit and will not have any ongoing debt. We insisted he do it this way. I HATE DEBT!!
The younger son, like the older one, gets so much heat from home that he won't dare over-use the credit card. We want him to eat, but we don't pay for his entertainment--that's his responsibility, and he can get jobs during college vacations to pay for that part of his life.
I have no idea how young people go so astray on credit card debt. But when anyone who owns a home does, the home-equity loan is much better than paying credit-card interest. |
