NEW YORK (MainStreet)—Twenty years ago the Brazilian economy was in a free fall. Unemployment was catastrophically high. Currency was caught in a cycle of super-inflation, sometimes spiking over 1,000% per year, with prices changing every hour and money measured by the suitcase. Things got so bad that, in an act of desperation, the government even seized bank accounts nationwide in an attempt to get some control over the economy.

That was then.

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Today the Brazilian Real is strong again, trading at just two to the dollar, and the country's GDP has become the eighth largest internationally. Sao Paulo has even been voted one of the most "economically powerful cities in the world," putting it in the company of places such as New York, Tokyo and London. Brazil's economy has made an incredible amount of progress, and, while there's still a long way to go, that's not an accident.

Among the many pieces to making Brazil work again, one of the most important has been the introduction of a strong system of financial education, as highlighted at the recent 2013 Financial Literacy Forum Series that MainStreet attended in Sao Paolo. Deciding that an economy is ultimately the sum of its parts, a combination of government, charity and corporate programs has grown across the country to ease people away from purely cash economics and teach them how to make sound financial decisions. Three years ago, in 2010, the government formalized this project with its National Strategy for Financial Education, a far more ambitious version of the U.S. commission on the same issue.

The explosion of Brazil's modern economy is nowhere more obvious than on the streets of Sao Paulo, where even the fruit stands and local esfiha vendors take credit cards. This success has brought its own set of problems, though. With the spread of physical infrastructure for banking and an electronic economy, it's become increasingly clear how often giving people access to something like a credit card without proper education can be even worse than never modernizing in the first place.

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Over coffee in I met with Sabrina Sciama, corporate relations manager with Visa, Brazil and one of the organizers of its in-country financial education program. From her offices looking out over the city, Sciama explained exactly why the program of financial education is so important to building Brazil's future and the uphill battle she's had selling it.

"It was a concept that, about eight years ago, a lot of people didn't get and a lot of people didn't understand the importance of," she said.

Often, according to Sciama, people wonder why well funded groups like hers don't work on more traditional causes like nutrition or housing, or they assume that because of its connection to Visa "financial literacy" is simply code for selling credit cards. Yet the importance of teaching people how to use their money is all about growth and survival, including making sure they understand how a credit card can help build or ruin their lives.

"[Brazil's new middle class,] they're getting a lot of credit, but they don't know how to use it," Sciama said. "We see people that receive monthly salaries of $400... and they have credit to buy cars and an apartment and this and this and that and all the installments they need to pay are much higher than what they receive monthly."

This problem hits young adults hardest, who have taken to credit cards and consumer loans in huge numbers as an opportunity to share in the success of the growing economy. In many ways its worked. A country once known for explosive inflation and crushing poverty has expanded its middle class by 40 million people in the last few years. The downside, however, has become spiraling, often inescapable, debt to credit cards that can have annual rates between 238 and 323%.

Credit spending has created a boom in the economy, but one that's increasingly threatened as more and more people have to spend huge amounts of money just on making their debt payments.

Yet while the young adults of Brazil are struggling with the country's success, many of their parents are still trapped by its past failures. Today as much as 40% of Brazil's population remains "unbanked," or without access to financial services, according to an estimate by Maud Chalamet, Managing Director of PlaNet Finance, Brazil. While much of that remains an issue of infrastructure, it's also in part a hangover from the hyperinflation of the 80's and 90's and the Plano Collor.

"I remember when I was eight, nine, I couldn't understand it," Sciama said. "I would go to a supermarket and it was empty inside. I was like why, why is it empty? Where are the products? And my father would say it was the inflation."

In an attempt to stop this process the government at the time instituted, among other measures, the Plano Collor. Led by Finance Minister Zelia Cardoso, the plan froze or seized bank accounts across the country, emptying out the contents in an attempt to break the cycle of inflation.

"People would wake up one day and their accounts in banks, [Cardoso] would take every penny out of their accounts," Sciama said. "This is a way to stop you from buying, and then we wouldn't have inflation. It was the worst nightmare. For people in their 40's and 50's, I think many of them still don't trust banks, because they're afraid that's going to happen again."

The result is that while Brazil's young people might be lining up to get their plastic, many of the previous generations refuse to even walk through the door of a bank. They feel safer keeping their money at home where they can see it, and where they know it can't vanish into a computer. It also means that they get left behind.

Unbanked populations face increasing problems, both individually and as a group. According to a report by the World Bank, they find it much harder to save money and build up their finances, and of course there's no access to interest on anything that they've saved. Unbanked populations also can't get credit, either personal or professional. Although it's a double edged sword, credit in the form of a small business loan or smart purchasing can just as easily allow someone to build a life as ruin one.

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Brazil will continue growing, that isn't a question, but it has to do so in the right directions with the financial literacy programs like the National Stategy for Financial Education--something U.S. consumers and policy-makers can learn from, no doubt.

--Written by Eric Reed for MainStreet