Are American’s doing enough to educate on financial literacy?

creditcards Representatives from major banks and credit card companies have been popping up on U.S. college campuses for years, each attempting to reel in unsuspecting, unemployed students who have no problem racking up a little debt. Sure, having credit to your name isn’t a bad thing, but the problem becomes more than just a little debt when you have tuition to pay, books to buy, food to eat and socializing to do.

But since the passage of the Credit Card Accountability Responsibility and Disclosure Act of 2009, or the Credit CARD Act of 2009, college freshmen and sophomores wishing to sign-up for a shiny piece of plastic require a co-signer if they’re under the age of 21. Not only that, but the law also prevents credit card companies from participating on college campuses and at university-themed events unless a valid reason is provided. And the “swag” that comes along with signing on the dotted line? Forget it. The Credit CARD Act of 2009 outlaws the giving of gifts or any promotional items to entice students.

I never fell for the lure of these credit card companies when I was on a college campus, but I did however sign-up for my own credit card prior to my freshman year in college. I was raised with great financial values. Having worked since I was 14, I knew how to manage my money and I was paying for my own bills. I could certainly handle my own credit card, right?

It wasn’t long though, before I started using my credit card for little purchases here and there. And that low credit limit that I started out with mysteriously kept rising higher and higher. Before I knew it, I was up thousands of dollars in credit card dept and only making the minimum payments. This went on for years. And although I stopped using the credit card, the balance kept going up. Climbing interest rates can be really hard to swallow.

So here I am, nine years since opening that credit card, and just this past spring (after years of non-use and minimum payments) found myself with enough money to pay off the entire balance in one lump sum.

Does that scenario sound familiar? It’s obvious that something needs to change. According to www.creditcards.com, the average credit card debt per household is $15,788, and the Federal Reserve’s G.19 report on consumer credit cites that the total U.S. revolving debt (98% of which is made up of credit card debt) is at $826.5 billion, as of June 2010.

To prevent these statistics from rising further, Ohio’s General Assembly passed Ohio Core legislation mandating financial literacy education for students beginning high school in the 2010 academic year.

The Ohio CPA Foundation stepped up and responded with programs to help students understand the importance of being financially smart. Through the Ohio CPA Foundation, OSCPA is committed to helping elementary students and high school students through two new programs being launched this fall:

In response to requests from teachers and OSCPA members to offer a program that addresses financial literacy basics such as budgeting, saving and spending at the elementary school level, The Ohio CPA Foundation created a new classroom activity, called FETCH!™: Financial Education Teaches Children Healthy Habits™.

The High School Personal Finance Program helps students in grades 9-12. By teaming up with Junior Achievement (JA), OSCPA members have the opportunity to assist educators in meeting this educational requirement firsthand through JA’s Personal Finance Program. The Junior Achievement Personal Finance Program introduces students to the importance of making wise financial decisions. Its curriculum demonstrates the importance of planning, goal-setting, and thoughtful choices within the context of personal financial decisions.

For more Financial Literacy resources, visit OSCPA’s Financial Fitness Ohio webpage for articles on every life stage, finding a CPA, small business and financial planning resources and more.

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One Response to Are American’s doing enough to educate on financial literacy?

  1. My College says:

    It’s sad how credit cards which was introduced on the idea of consumer convenience, is now being abused to the extent of getting people into debts.

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