Credit has its pitfalls and perks, teens told

MAGNA — College seniors carry an average debt of $20,400 — quite a load for a "starving student."

Zions Bank executives shared that finance tidbit with Cyprus High students this past week in hopes of educating them about the pitfalls — and perks — of credit. While credit can enable students to pursue their dreams of a college education or home ownership, it also can become a recurring nightmare.

"It's not free money," said Scott Anderson, Zions Bank president and CEO. "You've got to pay it back."

The comments came in Utah Teacher of the Year Ember Storrs' pre-calculus class to mark "Get Smart About Credit Day."

On Wednesday, Gov. Olene Walker declared the day to promote teen credit education.

Utah has the nation's highest bankruptcy rate, with one for every 36.5 households, states "The State of Working Utah 2004" report issued last month. That's around 20,000 bankruptcies a year.

Utah students have received failing grades on an insurance, debt and money management survey, according to The Jump$tart Coalition for Personal Financial Literacy. Students here correctly answered 48.8 percent of the group's survey questions; the national average is 52.3 percent.

Two-thirds of Utah families had credit card debt last year — twice as many as in 1990, according to Walker's proclamation.

Getting a credit card often is no sweat. But it must be taken seriously, Zions executives said. Young consumers quickly can become tangled in debt.

"I think (teens) get duped a lot," Cyprus junior Zach Cash said.

But they don't have to.

Zions executives taught students to use math skills to filter good financing deals from the bad and choose the right credit cards. They learned how to establish a good credit history, from setting up a savings or checking account or applying for a co-signed loan and repaying the debt on time.

Utah public schools also are attempting to address the problem. High school students soon will have to take a financial literacy class in order to graduate.

Storrs hopes the lessons will translate into practice.

"If they got it, we would cure the 'live beyond your means' pitfall adults (face)," she said.

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