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Rookie Mistake: Young Credit Card Consumers Rack Up Debt

Tuesday, January 15, 2013 - 8:20 AM
A study from Ohio State University shows that some young Americans are piling up so much debt it may take them until their 70s to finally pay it all off — if then.

Rookie Mistake: Young Credit Card Consumers Rack Up Debt | Credit Center | Credit Cards | Get the best rates on mortgage, home equity loans, CD, money markets and checking accounts | BankingMyWay

 
3
ShorebreakShorebreak2,367 posts since
Apr 6, 2010
Rep Points: 12,616
1. Tuesday, January 15, 2013 - 8:48 AM
Many young adults are not learning to use credit wisely at home because their parents don't understand how to do it either.  Those who go on to college many times don't fare any better.  Financial Literacy 101 is not on the curriculum and colleges are huge magnets for financial institutions.   

From The New York Times:
But many colleges, struggling to offset cuts in state funds and under pressure to keep tuition down, are finding new ways to strike deals with financial institutions, by turning student IDs into debit cards and allowing lenders to take over disbursement of financial aid.     

... Consumer advocates worry that financial firms are again profiting from unsuspecting students, by charging them fees and even gaining access to their financial aid funds.          

... Since the financial institution’s logo is often stamped on campus IDs, students may sign up for an account because they believe the university has endorsed the product, the report says. In some instances, students have to open an account if they want to obtain their funds quickly.  Federal financial aid is sent directly to colleges, which take the payments due and disburse the remainder to students. But now, many colleges have hired outside financial institutions to perform those functions and encourage students to keep their money with those institutions.

... As a result, banks and financial firms have “an unprecedented opportunity to market add-on products — bank accounts, A.T.M./debit cards and even loans and credit cards — to students with virtually no competition,” the report said. Students may also be charged automated teller machine fees to access their financial aid funds.

 

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If you get them while they're young, they're yours for life. 
3
pearlbrownpearlbrown1,356 posts since
Nov 2, 2010
Rep Points: 5,955
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