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Are You Smarter than a 5th Grader… About Credit?

Each October, Susquehanna Bank staff in Maryland, New Jersey, Pennsylvania and West Virginia take part in the American Bankers Association’s Get Smart About Credit program, providing credit education to teens and young adults. But how would you stack up against our young credit geniuses? Let’s check it out with a quick true and false on the basics of credit!

1. Under the new Credit CARD Act, adults under 21 will need a co-signer to be approved for a credit card. True or false?

TRUE. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 now requires card applicants ages 18-21 to have a parent co-signer or proof of an independent means to repay the loan. Those under the age of 21 who already have a credit card are not affected. Another change that directly affects young people: no more pre-screened credit card offers will be sent to them unless requested.

2. Paying the minimum amount due each month is the fastest and cheapest way to lower debt. True or false?

FALSE. Paying the minimum due keeps your account current but does little to lower your debt over a short period of time. Pay more than the minimum due on time each month to pay your debt down more quickly and to avoid late fees. New federal regulations governing credit cards will require billing statements to show how long it will take to repay the credit card balance paying only the minimum due, and how much should be paid to repay the balance in 36 months.

3. A bad credit report could hurt your chances of getting a new job, an apartment or even a cell phone plan. True or false?

TRUE. People with whom you are entering into a contract, such as a lease, often want to verify your reliability. A credit report is the easiest way to see a snapshot of your fiscal character. Landlords and employers use the logic that if you pay your bills on time, you’re more likely to pay rent and show up for work on a daily basis.

4. As long as you have a credit card, you don’t need an emergency savings fund. True or false?

FALSE. If you don’t have money saved and have to put a hefty balance on your credit card, you will have to pay interest. Having an emergency fund of as little as $500 can help you cover unexpected expenses, such as a new tire or a traffic ticket.

Want to learn more? To schedule a time for a member of Team Susquehanna to visit your school or youth / scouting group, email the Susquehanna Bank Community Relations Office at

Information in this article provided courtesy of the American Bankers Association Education Foundation, online at

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Posted in Financial Education, Industry News.

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