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According to a recentstudy, the average teenspends $104 a week. In2001, teens collectivelyspent $172 billion.Unfortunately, teens donot always spend wisely.The fastest growingage group of peoplefiling for bankruptcy is25 and under. Thesestatistics point to theimportance of solidfinancial planning.Cosignature Loans can also be secured by having a second person,called a cosigner or surety, sign the contract, agreeing to pay the loanif necessary. Often, young people buy their first automobile by havingtheir parents act as cosigners to the loan.Credit CardsCredit cards have become an important part of our culture. Theamount of credit card debt in the U.S. mushroomed to $680 billion in2001, with the average family holding 13 different credit cards. Theproblem was that the average credit card holder had $8,000 in outstandingcredit card debt and was paying 17 percent interest on thatamount. Figure 22.2 can help you choose a credit card.Example 3. John charged many items on his credit card, up to its$2,000 limit. Each month he pays $40 on the account, the minimumrequired by the card issuer. The interest rate is 19 percent.If John maintains the same payment rate, it will take him 33 yearsYour Credit ReportBefore credit card companies will give you credit, they will check yourcredit report. Credit reports contain information about your financial status,including your job history, how much you earn, and how much you owe.Credit reports also contain information about how long you have lived at yourcurrent address and whether you pay your bills on time. Credit card companiesalso want to know whether you own property such as a car or house that canbe sold to pay what you owe. Companies that are authorized to gather andreport this type of personal information will generate credit reports upon request.The law requires credit card companies to treat all applicants fairly. Theirconduct is regulated by the federal Equal Credit Opportunity Act. This lawstates that a credit card company may not refuse you credit if you qualify.In determining whether applicants qualify, this law requires credit cardcompanies to follow the same rules for everyone with similar income, bills,and credit histories.Check It Out Contact a credit reporting agency in your area. Does a creditreport exist for you? How can you obtain a copy?488 Unit 5: Using Your Purchasing Power