The Credit Card Generation Gap

12/16/2011 02:52 pm ET | Updated Feb 15, 2012

Every generation of young adults think they know more than the generation before. Call it the hubris of youth. This expansive self-confidence doesn't stick around indefinitely. Life has a way of leveling the generational playing field. I vividly remember the point when I realized my parents might not actually be as dumb I thought, and its devastating corollary -- I might not actually be as smart as I thought. I am now solidly in that previous generation and a little concerned about those coming up behind me. My concern has to do with something called the normalcy bias. Normalcy bias is "the phenomenon of disbelieving one's situation when faced with grave or imminent danger." Normalcy bias is the natural tendency to disbelieve the terrible even in the midst of it. In the throes of normalcy bias you simply have difficulty reacting to what you haven't experienced before. I was reading an article the other day that caused me to be very concerned about the generation coming up behind me, about their reaction to potential disaster and the normalcy bias. The article was about the federal government coming out with a prototype of a simplified credit card agreement. According to the article, the White House referenced a recent survey that said two-thirds of consumers don't understand how their credit card works. That two-thirds percentage caught my eye because I remembered another study done a couple of years ago by the Consumer Federation of America that said two-thirds of consumers don't understand what a credit score is. Two-thirds is a whole lot of people who don't understand something as fundamental and potentially disastrous as debt. I wondered how this monetary myopia was affecting the next generation, which led me to another article entitled, "Today's Young Adults Suffering More Financially Than Older Generations." The article contained this dire statistic: "Young adults' net worth is reduced by 27 percent as a result of unsecured liabilities, like credit card and student loan debt." This current generation of young adults has more reason than ever to believe they are smarter than their parents because of their almost innate connection to and familiarity with the dominant power system of this age, technology. Technology has put the hubris of youth on steroids. Smart is not just a phone designation to this generation; it may also be the default setting for their normalcy bias. They have so much access to information; it can seem inconceivable to them there might be something potentially disastrous -- like mounds of personal debt -- they don't know about and don't know how to handle. It's strange that a generation who can run rings around me on a Smartphone could be clueless about the credit card they used to buy the thing in the first place. I learned about credit and debt, what to do and what to watch out for, from my parents (after I was older, of course, and able to hear them again). My advice to this generation coming up is:

  • Don't wait too long before you starting talking to those of us who are older again.
  • Don't naturally assume you know everything about how the world works because you've got Google in your back pocket.
  • Don't assume the only knowledge worth having comes off a screen.
I imagine you'll be getting together with family, with older generations, over the holidays. I also imagine you'll be very popular, demonstrating your technological expertise by setting up the DVR, fixing the computer or conducting a tutorial on how to change phone settings. After you're through doing all of that great stuff, I encourage you to set aside a couple of moments. Stop texting or tweeting or playing games and have an actual conversation. You might consider asking your parents or your grandparents about how this whole debt-thing works. You may be surprised at how much they know. Or, if they are as clueless as you, maybe you or one of your friends could start designing a new credit app.