As this year’s college freshman navigate their new campuses and courses, they’ll also be presented with offers for free t-shirts, hats, and more, in exchange for a “simple” credit card application. 

At eighteen, teens can legally apply for and be approved for a credit card in their own name.   However, credit can either be a tool for helping teens establish a good financial future, or a path to insurmountable debt.  According to financial expert Dave Ramsey, more than 80% of graduating college seniors have credit card debt before they even have a job – and with the job market as tight as it is today, they may not have a way to repay their debts upon graduation.

But with appropriate education and supervision, credit cards can be a good way to build credit history, which will be essential for teens’ after-college independence.

Check out this great article, “Teach your teen how to handle credit cards,” from MSNMoney.com. Financial reporter Liz Pulliam Weston gives advice to parents with children as young as middle school, emphasizing the importance of financial education and responsibility – the key deterrents to overwhelming debt.

Interest.com has a great five-step education program for parents considering giving their child a credit card. By following these steps, your child can “ease into” having a credit card, so that the financial freedom – and responsibility – is manageable. Read more about the five steps in this article, “The best credit cards for teens.”

U.S. News & World Report just announced its annual list of best colleges and universities. Not surprisingly, the top five were all pricey Ivy League institutions: Harvard, Princeton, Yale, Columbia and Stanford. Without a doubt, these are great educational institutions – but they also bring a hefty price tag with them.

As thousands of students across the country enter college in the coming weeks, and as high school juniors and seniors start thinking about the right higher education institution for them, it’s important to consider several factors before a decision is made. While Harvard and other Ivy League schools are wonderful, they may not be the most practical decision for you and your family when it comes to financial responsibility.

With back-to-school just around the corner, consider the following when choosing the right college for you or your children:

• Programs Offered: Some degree programs are very specialized and not widely available, so be sure the college you’re considering has the program you’re interested in pursuing. Alternatively, some programs offer certifications or associates degrees at community or technical colleges – a much more budget-friendly option.
• Student Loans: Borrowing money to attend college is a good investment in your future, but don’t take on more than you can handle. Most loans begin repayment just months after graduation, and in a tough economy, it can be difficult to find a job that enables loan repayment. Be sure to investigate interest rates, terms and repayment options before committing to anything.
• Alternatives to the “Usual Suspects”: Trade schools, technical schools, apprenticeships and the military are all great alternatives to the “traditional” college experience, offering great on-the-job training and education, without a high cost. The military and even some jobs will reimburse your college tuition after a certain number of years, helping you to avoid debt all together.

The bottom line is this: an investment in an education is considered “good debt,” and it often pays for itself through higher paying jobs and more employment opportunities. No matter your financial situation, no one can ever repossess your education, so spend your time and your money wisely when it comes to choosing a college or university.

The United States Organizations for Bankruptcy Alternatives (USOBA), the leading trade association for the debt settlement industry, voiced its general support today for the Federal Trade Commission’s (FTC) heightened consumer protection initiatives for the debt settlement industry.

While USOBA does not agree with every provision, there are many points the trade association fully supports. Since its inception, USOBA and its member companies have worked tirelessly to institute protections for vulnerable consumers seeking debt relief assistance. Over the years, USOBA has lobbied consistently for the transparency and disclosure requirements now mandated by the FTC. Many of the transparency and disclosure statutes now required by the FTC are now, and have been, required of all USOBA member companies. In addition, USOBA supports the establishment of “dedicated accounts” for debt repayment, set aside as escrow for each client. 

However, the regulations as announced today by FTC Chairman Jon Leibowitz contain several debilitating restrictions on the debt settlement industry that will have unintended and destructive consequences for both consumers and the industry. 

Prohibiting debt settlement companies from collecting fees for their services until a settlement offer has been accepted and the consumer has made a payment is unreasonable and will not allow the industry to work efficiently and effectively on behalf of the consumer. On average, it takes 22-36 months to receive a settlement offer from creditors – an irrational an unfair deference of payment for the companies providing a much needed service to consumers. As it reads, this ruling will effectively force many good companies out of business, resulting in thousands of lost jobs and limited consumer choice – exactly what Vice President Biden so fervently opposed in his address. 

Every day USOBA member companies help people who are hopelessly behind in credit card and other unsecured debt. The typical individual who seeks help through debt settlement has lost a job, suffered a life changing event such as a serious illness or death or endured other personal calamity. Removing a viable option for debt relief for this consumer would only add to the financial struggles and economic woes of our nation.

The debt settlement industry offers an important middle ground for consumers. When credit counseling isn’t enough but consumers can’t qualify for bankruptcy, debt settlement provides a path to financial freedom. USOBA and its member companies believe the focus of any state or federal regulatory effort should be to protect consumers without limiting their debt relief options. We share the common goal of ensuring all debt settlement organizations operate in an ethical and transparent way that best aides the consumer.

Debt – it can happen to anyone. Some think that those who bring in a “certain level” of income are immune to financial hardships, but that simply is not the case. Often times, we hear stories of wealthy individuals or huge corporations filing for bankruptcy because of uncontrollable circumstances or poor financial planning.

In a story released this week by The Guardian, we learned that even royalty isn’t immune to debilitating debt, as Sarah Ferguson, Duchess of York, is considering filing for bankruptcy after years of money woes. The article states that the Duchess is considering a number of ways to manage her personal finances, but has yet to settle on one option:

Ferguson‘s spokesman said she was reluctant to declare herself bankrupt. “There is a number of options open to the duchess, of which bankruptcy is one. But it would be premature to say she is going into bankruptcy as the situation is being managed,” she said.

Many people around the world, no matter their income, are currently weighing their options for dealing with large amounts of debt. While bankruptcy is one alternative, it may not be right for you. Consider credit counseling or debt settlement as alternative to bankruptcy – these options take less time and have a smaller impact on your credit score and history.

Which option is right for you? Check out our blog post titled “Know Your Options When Dealing With Debt” for ideas on dealing with debt.

While it’s definitely true that it’s easier to avoid debt than to get out of it, try telling that to a teenager! It seems as if credit card companies begin contacting teens the moment they turn 18, and unless taught how to avoid being taken advantage of, they could fall prey to credit traps.

According to For Parents, By Parents, teens are spending more than ever. According to Teenage Research Unlimited in Northbrook, Illinois, the average teen spends about $85 per week, which means the current teen economy tops $141 billion a year. The federal government’s Jump$tart survey of over 4,000 high school seniors revealed that 32 percent used credit cards and 43 percent had access to ATM machines. Yet the vast majority of teenagers do not understand how to compare credit cards in terms of fixed or variable Annual Percentage Rates, finance charges, grace periods and so forth.

Parents are a teenager’s primary source of information when it comes to managing finances. They observe family values and attitudes about money, they learn the importance of saving, and they learn to value what they have.

Research suggests that teens are more knowledgeable about the use of money when they are given a variety of experiences including the opportunity to both save and spend. Teens also benefit from watching their parents handle family income wisely. As role models, parents can instill financial responsibility and encourage their teens to learn basic money management techniques.

Check out the following information from an article titled “Instilling Financial Responsibility in Your Teen,”and remember these simple things:

Teens should be encouraged to compare alternatives, make decisions, and take responsibility for them. However, parents should also explain the consequences of violating their spending limits. Teens must realize that saving is a way to get what they want or need in the long run. Saving in case of emergencies also teaches them good planning skills. Express the importance of being prepared for anything. For example, their car may get a flat tire, and they will want to be able to fix it right away so that they aren’t stuck without a car. Your teen may assume that you would handle this kind of dilemma for them, but making them think about it and plan for the unexpected will help make them more responsible.

Teaching your teen how to manage money properly, and making sure they understand the consequences of poor spending habits, will help mold them into mature adults who can make good financial decisions.

Additional resources include:

• How to educate kids on money matters, MSNBC
• Teaching Our Kids Fiscal Responsibility, Families.com
• Teaching Your Teen Credit Card Responsibility, Associated Content