Since the economic downturn, one might think that more people are wary about using credit cards and using them wisely. More educational opportunities and articles are put out there on a regular basis, seeking to protect consumers from the traps and complexities of the banking system, including credit cards.
Fox Business reports the findings of a study called “Financial Literacy and Credit Cards: A Multi Campus Survey.” The study researched college students’ credit card use and their knowledge regarding their credit cards. Researchers hoped to get good news out of the survey, but it turns out that credit card debt will likely have to be another thing for graduates to deal with who will already have a hard time finding work and paying off college loan debt.
Among various findings from the survey are the following points:
- 70 percent of college students have credit cards
- Among those with cards, 70 percent of those students have multiple cards
- Five out of six don’t know the interest rates on their credit cards
- 90 percent of college students with credit cards have credit card debt from month to month
The survey also revealed that compared to a decade ago, significantly fewer students are paying off their credit card balances in full every month. Sources suggest the reason could simply be because of the economic times we are in. There are still as many things to pay for as before, but there is just less income to cover the payments every month.
While the numbers above are worrying enough, another point behind the campus survey is that the majority of students who were surveyed were majoring in business. They weren’t students studying biology or Shakespeare. They are the exact students whom would be expected to understand the basics of money and business.
The survey makes it seem clear that more education needs to be provided to consumers, beginning at a young age and on, about the basics of and risks associated with credit cards. Though credit cards can be and are helpful tools, they can also be the very tools that chip away at one’s dreams.
Source: Fox Business, “Survey: Students Fail the Credit Card Test,” Martin Merzer, April 16, 2012