Mom and daughter paying with credit card
Photo: Creatas/Thinkstock
As anyone who watched Oprah's Debt Diet knows, we have a huge debt problem in America. Although there are many resources in Oprah's Debt Diet section, many of which would apply to your children—particularly those in college—there are a few lessons you should emphasize to not just raise money-smart kids, but credit-smart kids as well.

A credit card is a valuable tool
I believe this wholeheartedly. Having a credit card at their disposal is, I believe, important for children who are about to leave home. With a credit card in their wallet they have cash available—immediately—should they need it to buy a plane ticket to fly home in an emergency, for instance. However, I think this tool should come with the same instructions my mother gave me the first time I got behind the wheel of a car. She said, "You are taking on a huge responsibility. You are now in charge of something that could destroy lives—including your own." Ditto for a credit card if handled improperly.

A credit card can be a very expensive way to buy things
Research has shown us that college freshman and sophomores tend to be a little frightened of their new plastic. They tend to reserve them for emergencies. In the later years of college, however, a change takes place. Student loan debt starts to mount. The numbers get huge—daunting—and all of a sudden, these same students use their credit cards with abandon. Why?

Researchers surmise that they have never been taught the difference between good, inexpensive student loan debt (in my book, good debt is debt that gets you somewhere—it's your first mortgage, the car loan that gets you back and forth to work, or educational debt) and expensive credit card debt. So be sure to teach that to your children before they go off to school.

And remember what Ms. Beck taught my son: If you put $500 on a credit card one month and only pay the minimum, you owe more the next month—even if you don't buy anything else. Instead, you're best off if you charge only the amount you can pay in full each month. Then the rate of interest on your credit card is meaningless. Why? You never pay it!