"Credit is extremely valuable, and it's really important to treat it with respect," says Lori Mackey, founder of Prosperity4Kids, Inc., a company that specializes in educating young people on credit cards (primarily kids who are a few years away from starting college).
"I think the most important thing for young adults to know is what it is that they're signing for. If they mess up their credit," Mackey says, "everything is going to cost more. It also could jeopardize their getting a job, because some employers look at your credit history, and it could mean you can't buy a home or a car. You may not even be able to rent."
Know your annual percentage rate, or APR. This determines how much interest you'll pay on your credit card debt if you carry a balance.
Many credit cards come with a "teaser rate" to entice you to sign up for the card. For instance, you may be offered zero interest for six months. It's important to know what that rate will be after six months. If the APR jumps to 24 percent, and you've got a $1,000 balance, that's suddenly going to cost you $20 per month.