The Top Ten Money Myths: How Many Have You Fallen For?

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As part of my job, I’ve spent the last four years talking to young people about money. I keep hearing these 10 money myths. How many have you fallen for?

1. I don’t have to worry about credit at my age. Not true. By your early teens, you need to start paying attention to how you manage your money and use credit.


 
2. Bad credit can’t keep me from getting a job. Businesses look at credit reports to judge financial stability and personal responsibility, qualities that suggest you’ll be a responsible employee. Bingo, bad credit hurts your job chances.


3. All loan companies have the same rates. False. The difference in interest rates for borrowing the same amount for the same term can be the difference between a $50 or a $100 payment.


4. All credit cards are alike. Some cards are total rip-offs. They have high interest rates and penalty fees and tough penalty terms (even under the new federal credit card rules).


5. The job of financial advertising is to tell the truth. Actually, financial advertising aims to get you to use a product or service, whether it’s good for you or not.


6. It’s OK to bounce a few checks. Bouncing a few checks is expensive. Do it every month, and you can lose your account and hurt your credit.


7. It’s OK to make minimum payments on a credit card. It’s okay to make minimum payments if you’re an idiot. Owe $500 today; take six years and $529 in interest to pay it off. Pay $5 more than the minimum and pay it off in just over 3 years and pay only $276 in interest.


8. Paying late occasionally can’t hurt my credit. A few payments thirty days late will lower your credit score.


9. Fine print isn’t important. Hey, the fine print is usually where the binding legal terms of the agreement are!


10. Young people don’t have credit scores. Guess what? Age doesn’t determine when you have a credit score. How you handle money determines your score.

Don’t let myths mess with your money and your credit. Get Smarter! Check out FoolProof Solo. You’ve been meaning to do that, ey?

Cheers, Will.