Frank Abagnale is the real star of the movie Catch Me if You Can.
Between the ages of 16 and 18, he flew more than a million miles on more than 250 flights to 26 countries.
Got caught, went to prison, and has been working with the FBI to prevent financial fraud for the past 40 years.
He gave a talk at Google. And while the full hour is worth your time, here is a bit that links up with my earlier post on teaching children about money.
Abagnale (at the 43:40 mark in the video) talks about
- why a credit card is the safest financial instrument you can use.
- and how you can help your kids by giving them a credit card early on.
If you prefer reading to listening, here us a lightly edited version of what he said:
So I use the safest form of payment that exists on the face of the Earth. And that is a credit card.
Credit card: Visa, MasterCard, American Express, Discover card.
“Every day of my life, I spend their money. I don’t spend my money. My money sits in a money market account. It earns interest.”
I go to the dry cleaner. I give my card.
I picked up the groceries. I give my card.
I put fuel in my boat on the weekend. I use my card.
I pay the marina to keep my boat in the water all year long. I use my card.
And then if I pay the bill in full or part of the bill, my credit score goes up. So I’m building credit while I’m using that credit card.
But if tomorrow someone gets my card number and charges $1 million on my credit card by federal law, my liability zero. I have no liability. So, yes, I love to shop online. I don’t use a special card. I just use my credit card. If they don’t deliver the merchandise, if they deliver it and it’s broken, if the host site I went to was fictitious to begin with, I have zero liability.
When you use your debit card, you are exposing the money in your account. The only person who is going to get robbed is you.
When you use your debit card, you could use it for the next 50 years, 20 times a day. You will not raise your credit score by that much.
So I had three sons that went off to college, and I said to them “I’m not giving you a debit card. I’ve actually applied for a credit card in your name. So, it’s your card. Of course, you’re 18. You have no credit. So I guarantee the card.”
“So, as a guarantor of the card, three things take place:”
“One, the bill comes to me and I’m responsible for the bill. So if you spend a lot of time in the bar. I’m going to know that.”
“Two I set the limit on the card. So whatever I want you to spend each month is while you’re at school, I’ll set that limit.”
“Third, every month that I pay. The bill goes on your credit. So by the time you get out of college, you should be looking at a credit score of about 800.”
“You want to buy a car, buy a house, buy a condo; you’re not gonna need me to do that.”
All three of my sons came out of college with scores of around 800.
One of the best things you can do for your kids is to teach them to learn to use credit early on and build credit in their name.
Credit is a very important thing. Everything is based on your credit. The company hires you. They’re going to check your credit. If you buy auto insurance, they are going to check your credit. If you buy life insurance, they are gonna check your credit. Everything is based on your credit. So you want to make sure that you maintain a good credit score.
It’s one the best things you can do for your kids.
If stuff like this interests you, join our Telegram channel
