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Why I wish my high school had made me take home a credit card — not a plastic baby

Long story short: Credit cards are not free money.
Blonde woman using smartphone and using bank card at home
BARCELONA, SPAIN. Blonde woman at home.Getty Images stock

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By Caroline Moss

In the fall of 2002, I was handed a plastic baby in health class. It was finally my turn.

At this point, I had watched several friends take home "The Baby" and asked them incessantly how it was going, impatiently waiting for said baby to make its way home with me. The baby — a tool to teach 15-year-olds that sex has consequences — joined me on the bus ride home on a Tuesday and I would bring her back on a Friday, along with an SD card that tracked how many times I had fed, changed, burped and rocked it. (I also got a keychain with little cards to stick in a slot in the baby’s back, which would register how long it took me, the “parent,” to fulfill her needs. This was how I would be graded.)

Turns out I hated having the baby at home. I had to bring it everywhere with me! Dance class, hanging out with friends, to the dinner table with my family where my 12-year-old brother and 6-year-old sister would glare at it every time it screamed and interrupted whatever they were talking about at the time. My parents would try, unsuccessfully, to stifle their laughter as I would try, unsuccessfully, to find the proper key to shove into the baby’s back at the proper time.

Over time, I forgot about the baby. (I didn’t get pregnant, though I don’t know that this exercise deserves all the credit for that.)

But when I got to college, another adult experience waited to plague me, and this one I was much less prepared for: credit cards.

You see, while our educators had us busy shoving a keychain in a doll in the hopes that we would remain abstinent from intercourse, they missed an incredible opportunity to prepare us for something more common than teen pregnancy — taking on credit card debt without fully understanding the risks.

Will sign up for Starbucks

When I got to college in 2005, we were still three full years away from the housing crash of 2008 and banks were handing out credit to anyone, anywhere — even college freshmen just trying to get to the dining hall for dinner.

Bank ambassadors often stood between us and the tray line, offering tote bags, T-shirts, posters and $10 gift cards to Starbucks to simply sign up for a credit card! What did that mean? Damned if I know! But $10 to Starbucks just to fill out a form with my name and social security number was easy. Plus, if you signed up for a bunch of cards, you could get a $10 Starbucks card for each one!

My friends and I were broke college kids; think of all the Starbucks we could get with $60 in credit there! We thought we were really gaming the system. We just wouldn’t use the credit cards. Or we’d only use one! Or we’d cancel the other five as soon as we knew they couldn’t take the Starbucks cards from us. We were geniuses.

If you hadn’t guessed by now, we were actually quite undereducated about what we were doing outside the dining hall 15 years ago. No one had ever talked to us about credit cards or what they meant or how they worked or how they would affect our ability to do anything for the rest of our lives. I had just gotten my first debit card two months earlier. I was still learning how to deposit checks correctly at the ATM, and yet there I was, signing up for nearly $21,000 worth of credit onto various bank cards in the span of one week. ONE WEEK.

The non-emergency emergencies

It wasn’t long before my new cards started to arrive in the mail.

Congratulations! The generic form letter that arrived with the card said, this is your new Bank of America travel bonus credit card! Your line of credit is $2500.

Congratulations! This is your new Chase Purple Rewards credit card! Your line of credit is $5000.

Congratulations! This is your new American Express Diamond Preferred card! Your line of credit is $1800.

This went on and on. And on. At first, I wasn’t using the cards. I kept one in my wallet, you know, for emergencies. The rest I kept in my sock drawer. Once, I went to the grocery store, and I didn’t have any cash. In my wallet, I had my debit card and my “emergency” credit card. It was Super Bowl Sunday and I was buying snacks for a party my friend was throwing off-campus. The total came to $67, way more than I was used to spending on... anything, really. If I had put it on my debit card, I would have 67 fewer dollars in my checking account. Maybe I should use my credit card, I thought. It’s like free money!

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Long story short: Credit cards are not free money. Credit cards are actually more expensive money, which I know is hard to wrap your head around if no one ever taught you about it, and no one ever taught me. For a long time, I would drop $150-200 a month on my credit card and then when it came time to pay the bill, the bank would tell me I only had to pay the minimum payment of $25. Easy enough, so that’s what I’d pay!

The interesting thing about interest

Do you know what happens when you pay only the minimum of $25 towards a $200 monthly bill? I’ll tell you (because, again: No one! Told! Me!). You get charged interest on the $175 you don’t pay off. It’s basically the money you pay to be able to say “I need more time to pay this bill.”

I didn’t understand this at the time and thought I could just pay whatever and it wouldn’t matter either way! Wrong.

Since I was a new credit card user and had not established credit yet, my APR (in other words, the amount of money I would be charged for holding a balance on my card) was higher than someone with a strong credit history — I believe on my first card, it was 20%.

Twenty percent of 175 is $35. So if I paid $25 on a $200 bill in September, bringing my bill down to $175, I’d then be charged $35 interest on top of that, making my bill for October $210 before I even spent another dime.

By the time I graduated from college, I had over $10,000 in credit card debt. Most of it was the interest I owed for not paying off my bill in full every month. It sucked. And I felt cheated by an education that sent me out into the collegiate world as an adult without preparing me for what would be ahead.

Instead of a plastic baby, I now often argue, I would have loved to have been supplied with a “credit card.” My teachers could have given us a $250 cash gift card to use as a “credit card” and taught us how to budget, basics like “what APR means” and that it’s less than ideal to cancel credit cards.

In 2005, banks were, well, banking on the promise that 18-year-olds like me were too dumb to say no to a $10 gift card. They were right! We were. And we paid the ultimate price (plus interest).