“A new survey from BMO Harris Bank shows consumers are confused on how credit card balances affect credit scores. . .”

While using a credit card is one of the easiest ways to build credit, there are plenty of misconceptions about how best to do that.  According to this survey

• 39 percent of Millennials—people between ages 18 to 34—believe carrying a balance increases their credit scores. In fact, carrying a balance does not improve credit scores and can actually hurt scores.
• 23 percent of those surveyed indicated that a person’s educational level affects his or her credit score. In fact, a credit score is based only on the information in your credit report, and educational level is not included in your credit report.
• 27 percent of those surveyed thought checking their credit scores would lower their credit score. In fact, the opposite is true:  If you regularly check your credit scores, it’s likely you’ll make financial decisions that will improve your credit score.

For more information go to http://finance.yahoo.com/news/credit-card-mistake-thats-costing-103040745.html

Teaching Suggestions

You may want to use the information in this blog post and the original article to

• Discuss why a credit score is important.
• Stress the importance of “managing” credit card debt.

Discussion Questions

1. What affect will your credit score have on the finance charges you pay for credit purchases?
2. How can your credit score affect your ability to purchase a home or an automobile?
3. Assume you have a low credit score and have been turned down for a home mortgage. What steps can you take to increase your credit score?