If the greeting card aisle at my local supermarket is any indicator, we are headlong into graduation season. And while all graduations are significant and worthy of a nice card -- with the possible exception of graduation from preschool, which (sorry) I just don't get -- none is quite so momentous as graduating from high school. That's a real milestone that signals a rite of passage from youth to adulthood.

Whether you have years to go or only months to teach your kids what they need to know to survive in the real world, do not fail to teach your kids about credit cards before they leave the safety net of your home:

-- Use plastic, and you'll spend more. People who use credit cards and debit cards to pay for things spend twice as much as those who pay with cash or checks. One study reported by professor James A. Roberts of Baylor University found that customers at fast-food restaurants spend 50 percent more when they paid with plastic.

-- Credit cards are not free money. Whenever you pay with credit, you have just signed up for a very expensive loan from a company that doesn't care at all about you as a person. They will allow you to borrow more money than you can afford to repay.

-- Credit card companies charge interest. You will have to repay every dime that you borrow plus a lot more in "interest." This is how the credit card companies make money. And if you pay it back using the payment schedule they set up, you will end up paying back $2 for every $1 you borrow. Here's an example: If you pay $50 a month on a $2,000 balance at 18 percent interest, it will take more than five years to pay off the debt. If you pay less than $30 each month, you never will get out of debt.

-- If you mess up, the punishment will be severe. If you pay late or go over your credit limit, it puts a black eye on your credit history. Without a good credit report, you may have a hard time renting an apartment or getting a job. That's because the world sees the way you handle your money, and they assume that's how you handle your life in general.

-- Never carry a balance; never pay late. If you keep your credit card balance at $0 every month by paying the balance in full and you never pay late, you will start to build a good, solid credit report. And you won't have to work hard just to keep the credit card companies in business.

Parents, share your personal credit experiences with your kids. If you've messed up and then made things right, tell them about that. Use your own experiences to teach them that earning money is not easy. But it's a lot harder to earn money that you've spent already.

Mary Hunt is the founder of DebtProofLiving.com and author of 17 books, including "Debt-Proof Living." You can e-mail her at mary@everydaycheapskate.com, or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. To find out more about Mary Hunt and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.
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