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    College Students Are Credit Card Dunces

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    Simply Debt Solutions
    The study found that most college students lack basic knowledge about credit cards and their costs. While over 70% of undergrads and 96% of graduate students have credit cards, less than 10% pay their balance in full each month. Only 15% know their interest rate and less than 10% are aware of late fees and over-limit fees. The researchers conclude that financial literacy education for students is failing. Students with business or ethics courses knew more about credit card costs, showing education can help. The researchers call for improved education to address this problematic lack of knowledge.

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    College Students Are Credit Card Dunces

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    Simply Debt Solutions
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    The study found that most college students lack basic knowledge about credit cards and their costs. While over 70% of undergrads and 96% of graduate students have credit cards, less than 10% pay their balance in full each month. Only 15% know their interest rate and less than 10% are aware of late fees and over-limit fees. The researchers conclude that financial literacy education for students is failing. Students with business or ethics courses knew more about credit card costs, showing education can help. The researchers call for improved education to address this problematic lack of knowledge.

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    The study found that most college students lack basic knowledge about credit cards and their costs. While over 70% of undergrads and 96% of graduate students have credit cards, less than 10% pay their balance in full each month. Only 15% know their interest rate and less than 10% are aware of late fees and over-limit fees. The researchers conclude that financial literacy education for students is failing. Students with business or ethics courses knew more about credit card costs, showing education can help. The researchers call for improved education to address this problematic lack of knowledge.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    20 views2 pages

    College Students Are Credit Card Dunces

    Uploaded by

    Simply Debt Solutions
    The study found that most college students lack basic knowledge about credit cards and their costs. While over 70% of undergrads and 96% of graduate students have credit cards, less than 10% pay their balance in full each month. Only 15% know their interest rate and less than 10% are aware of late fees and over-limit fees. The researchers conclude that financial literacy education for students is failing. Students with business or ethics courses knew more about credit card costs, showing education can help. The researchers call for improved education to address this problematic lack of knowledge.

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    College Students Are Credit Card Dunces


    By MARTHA C. WHITE | April 12, 2012 |
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    Don't let your child wear a dunce cap. I nstead, teach him financial liter acy.

    Even after lawmakers made it harder for banks to give college kids credit cards, credit card debt is still a big problem on U.S. campuses. A new study pinpoints the simple, frustrating reason why: Students dont know anything about the fundamentals of credit card use. I t is clear the status quo of financial literacy is a failure, they write. So, just how dumb are kids these days? Although 70% of undergrads and 96% of graduate students have credit cards, fewer than 10% pay their balance in full every month. Only 15% have any idea how much their interest rate is, and fewer than one in 10 students know their interest rate, late fee and over-limit fee amounts. We get it nobody likes squinting to read acres of fine print, but this is a pretty pathetic showing, especially given that 92% of these students were business majors. There is no way to describe these results as a success in education of financial literacy, researchers wrote. (M ORE: 60 and Still Not Out of Student Loan Debt: Seniors Facing $36 Billion in College Loans) Revolving a boatload of debt without having any idea of how much youre paying for that privilege might seem like just another instance of collegiate flakiness, but thats no excuse, says Gail Cunningham, spokeswoman at the National Foundation for Credit Counseling. By virtue of the fact that theyre in college, it indicates that they have the ability to learn these basic building blocks of financial success but are choosing not to. The study, Financial Literacy and Credit Cards: A Multi Campus Survey, was published in the April issue of the I nter national Jour nal of Business and Social Science. It included 725 students at five different schools. When researchers broke the group down by demographics, they found that students who had taken either business law or ethics classes were more knowledgeable about credit card costs. (Researchers speculated that the ethics students may have been exposed to more news about the financial crisis that included discussion of credit cards.) These results should serve as a wakeup call for both our college students and our college outreach efforts into the community to train people about the costs of credit, the studys authors write. They point out that if college students, who ostensibly have enough schooling under their belt to read a credit card statement, are still clueless about the basics of such a fundamental product, theres probably even less financial literacy among less-educated Americans. (M ORE: Back-to-School Special: 9 Credit-Card Tips For Students) The effects of this knowledge gap linger long past the college years. A recent survey conducted by the National Foundation for Credit Counseling asked nearly 1,200 people in what aspect of personal finance they could use the most help. A majority 56% selected improving my credit score, while only 5% chose understanding my credit report. Most didnt grasp that understanding your credit report and whats in it is the first, biggest and most important step toward improving your credit score. Cunningham says college students especially those business majors who manage to earn a four-year degree without knowing even the most rudimentary facts about their finances should look in the mirror when theyre wondering why their credit is crummy well into adulthood. The financial pain theyre causing is evidently self-inflicted, she says. Stay Connected with TIME.com
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