ABA Education Foundation provides credit tips for stages of life
WASHINGTON, Oct. 17, 2012 /PRNewswire-USNewswire/ -- More than 2,300 bankers in 450 communities around the country will observe national Get Smart About Credit Day on Oct. 18 by reaching more than 130,000 young adults with important lessons on building good credit habits that last a lifetime. Topics include how to manage a credit card and read a credit report, protecting your identity and recognizing signs of overspending. The American Bankers Association Education Foundation, the sponsor of the Get Smart About Credit program, is celebrating the day by offering credit tips for every stage of life.
"Bankers across the country are influencing the lives of countless young adults by teaching them that the financial decisions they make now can impact their ability to get loans, or even a job, in the future," said Frank Keating, ABA president and CEO. "Few young people have access to financial education through their school, which makes banker volunteer efforts and Get Smart About Credit Day more important than ever."
ABA Education Foundation national partners BBVA Compass, U.S. Bank, and Well Fargo along with hundreds of banks nationwide take part in Get Smart About Credit Day to demonstrate bankers' commitment to financial education. Participating banks are listed on the Get Smart About Credit Honor Roll -- a list provided by Qualtrics survey software.
To help consumers better understand the role credit can play in different stages of their lives, the ABA Education Foundation offers the following credit road map:
- Get your feet wet with a credit card. Because of its convenience, credit cards are usually your first form of a loan. They enable young adults to build a credit history and learn how to manage money wisely, and they also provide an emergency resource. However, a credit card is only valuable if managed correctly. Remember, just get your feet wet. You don't want to start your credit life drowning in debt.
- Coast into the next stage with a car loan. Save as much as possible to make sure you have enough to make a good down payment. A strong down payment shows that you have discipline when it comes to saving. The more money you put into your down payment, the more attractive you will look to lenders in the future.
- Build on your existing foundation with a home loan. Make sure you know how much you can afford. Make a budget of your current expenses – car payments, credit card debt, etc. – and potential mortgage payments, taxes, and homeowner's insurance, aiming to keep all debt payments below 40 percent of your monthly income.
- Help your kids navigate the complexities of credit. Some parents choose to co-sign for credit for their children. Before making that commitment, you should be aware that while co-signing establishes a credit history for your child it also puts your credit score on the line. Make sure your child will be able to manage his or her payments to avoid getting in debt. If you feel unsure about a credit card, consider a prepaid card that can be linked to your bank account, allowing you to transfer funds if needed.
- Take it easy. Later in life you won't need as much credit so start thinking about what you can manage. Make things simple for yourself by paying down existing debt and thinking twice before opening a new line of credit.
The ABA Education Foundation provides financial education programs and resources that help bankers make their communities better. More than 123,000 bankers have taught basic finance skills to some 5.2 million young people through participation in the Foundation's signature programs, Teach Children to Save and Get Smart About Credit. Founded by bankers in 1925, the foundation is guided by a board of bankers and is an affiliate of the American Bankers Association.
For more information, visit www.abaef.com or call 1-800-BANKERS.
SOURCE American Bankers Association