As a teacher, I expect to see students who struggle with the concept of credit and how it works. The funny thing is, I saw it all the time with people in their 30's, 40's and 50's when I was a financial planner. The concept should be simple....do no spend money you do not have. But we Americans love ourselves some free stuff. How many times have I heard, "I didn't have the money" or "times were tough", so we put it on credit. That is the one way that teenagers and poor money managers are the same, they are both full of excuses
Early on, when we are young, we have something known as juvenile credit. No, I am not referencing teenage boys buying water ballons and toilet paper for a night of highjinks, but rather the fact they having no credit history can be just as much of a problem as a bad credit history. No one wants to sell a car or rent an apartment to someone they can't trust, and that is what our credit history tells people. Can I trust this person?
The high price of bad credit is way more than a few $30.00 late fees. The following list highlights the various ways a poor credit score can cost you, literally.
Inability to Open a Checking Account: if you don't have a checking account, you cannot pay bills by check or online. You will have to waste time, (you could be working) to go to the various locations to pay your bill in cash.
Using Check Cashing Services: Not only do many of these services charge a hefty fee, (Walmart is the cheapest, places like Check-n-go are way expensive), but now you are walking around with tons of cash that you are more likely to spend on things you do not need.
No Zero Percent for You!: Not only will you not be able to get the "special" deals you see on T.V., you will actually have to pay much higher rates for car loans and home loans. If you can even qualify!
Not Hiring: Having worked in the retail banking industry, I speak from experience. We performed credit checks on every employee and if you had below average credit we would not hire you. This rule also applies to any other company where you handle money or are what is known as a fiduciary. A fiduciary is someone like a financial planner who is in charge/control of large sums of money. (ThinkBernie Madoff)
The above reasons could possibly cost you thousands every year. This is the difference between getting ahead and just getting by.