Bret Hooper Advises Parents to Teach Graduates Credit Card Basics

Bret Hooper has a simple mandate for parents of new graduates: stop treating credit cards like magic money and start treating them like a tool.

It’s a tool that can build a future or bury it under interest charges.

The column, written for Edward Jones financial advisers, breaks down the three main ways young adults handle money today. Credit cards. Debit cards. Prepaid cards. Each has a place. Each has a trap.

Most graduates don’t know the difference between a trap and a tool. They swipe. They spend. They wait for the bill.

Hooper notes that 69% of Americans aged 18 to 29 carry at least one credit card. That’s the Federal Reserve data. It’s a high number. It’s also a high-risk number if those kids don’t pay the full balance every month.

Revolving credit is the technical term. It’s a cycle. You borrow. You pay. You borrow again. Do it right, and you establish a track record. You cover emergencies. You earn cash back. Do it wrong, and interest accumulates. It adds up fast. A high balance relative to your limit hurts your score. You charge more than you can pay. You open new cards to cover the old ones. You dig a hole.

The advice is blunt. Pay off the balance monthly. Pay on time. Treat the card as a convenience, not a lifeline.

Debit cards are the other side of the coin. They draw directly from a bank account. That limits overspending. You can’t spend what you don’t have. But they aren’t risk-free. Overdraft fees hit hard. Fraud protection is weaker than credit cards. And they don’t build credit history. You’re spending your own money. You’re not proving you can manage debt. For a young person starting out, Hooper calls it a practical way to manage day-to-day spending. But it’s not a wealth-building strategy.

Then there are prepaid cards. Money loads onto the card before use. Spend what’s there. No debt risk. No credit history needed. No bills to pay.

They come in flavors. General purpose reloadable cards work anywhere. Payroll cards distribute wages. Gift cards are just for gifts.

The downside? Fees. Activation fees. Reloading fees. Transaction fees. They add up. Read the fine print. And they still don’t help build credit history. Transactions usually aren’t reported to credit bureaus.

The goal isn’t just to survive the first job. It’s to build financial confidence for decades.

Teaching the difference between these tools matters. It’s not just about avoiding debt. It’s about understanding how each tool affects the bottom line. A graduate who understands revolving credit won’t treat a credit card like a second salary. A graduate who understands prepaid cards won’t get blindsided by hidden fees.

Hooper’s column is a reminder that financial literacy isn’t a college major. It’s a life skill. And most parents aren’t teaching it.

They hand over a card. They hope for the best. They wait for the first missed payment.

The short version: Teach them to pay in full. Teach them to watch the fees. Teach them that credit is a reputation, not just a limit.

If they can’t manage a $500 limit, they can’t manage a $50,000 mortgage.

The data is clear. The risks are real. The solution is basic.

Make them read the fine print.