The new star of "Two and a Half Men" doled out simple, but sound financial advice for young Americans.
"Don't ever charge anything on a credit card if you don't already have the money in the bank to pay for it," said Ashton Kutcher on Sunday night after receiving the 2011's Teen Choice Award for Best Male Romantic Comedy actor for his role in "No Strings Attached."
The advice comes at the right time. August is the most popular month for students to apply for a credit card, according to a 2011 survey by Student Monitor. And not just college students.
The same survey found that seven in 10 students got their first credit card at 18 years old or younger. More than half received their card before starting college. New regulations that went into place last year stipulate that consumers under 21 must have a co-signor or proof of income to get a credit card.
Mr. Kutcher's statement also touches on a fine point: Credit is not inherently bad. Using it unwisely is. And when it comes to younger consumers, a slipup may hurt more.
"For anyone with short credit history and a thin file, like one or two accounts, your credit behavior is going to become even more critical than if you have longer history," says Barry Paperno, consumer operations manager at myFICO.com.
So one missed payment may drag down your credit score a lot more than if you had a more robust credit history that included a mortgage, several credit cards and an auto loan.
The more specific advice offered by Paperno is No. 1: Pay off your balance every month. That way you don't get in over your head with a runaway balance. No. 2: Don't get close to your credit limit. That, too, will help you stay within your means.
By the way, in case some of Kutcher's fans didn't take his message to heart the first time, Demi Moore's other half reiterated on his Twitter feed last night saying, "Thank you all for the award and the love! And I'm serious about thy credit card thing. #tca."
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