Teenage Debt Problems Over Lack Of Credit Card Knowledge?
Although credit card borrowing and irresponsible credit card use seems to be stabilizing over recent months recent studies have revealed a worrying trend amongst some of the UK's teenagers. This could result in them ending up in a mountain of debt whilst still at a relatively young age simply through lack of knowledge about how credit card spending and repayments work.
The Personal Finance Education carried out the study recently, revealing that many teenagers do not worry about how they would repay the balance on a credit card after spending on it, and many seeing credit cards as an easy way to get a hold of money.
The survey revealed that around half of UK teenagers had been in debt by the time that they reached seventeen, or would be in debt by the time they were seventeen. 90% of UK teens were found to see credit cards as an easy means to get cash that they would otherwise not be able to get, and nearly 25% of 18 year olds through that spending on credit cards was fine because their parents would be likely to foot the bill and pay the balance.
Amazingly, one in twenty teens in the UK thought that they did not have to repay the debt on a credit card, and even those that did understand more about spending on and repaying credit cards did not seem concerned about the levels of debt that could build up.
One PFE spokesperson stated: 'Whilst we are pleased to see that today’s young people are relatively clued up on the mechanics of spending and saving money, it's also alarming to note how seamlessly they appear to be drifting towards an adulthood of debt. We owe it to our young people to ensure that they have the financial acumen to deal with the responsibilities of being an adult. That's why personal finance education is absolutely vital in schools. We firmly believe that incorporating financial education into the existing school curriculum in a way that is relevant to young people's lives is the best way to help them gain and retain the financial skills they need for the future.'
Tom Smith
10th April 2007
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