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Credit Card Debt

In: Business and Management

Submitted By Ashvenk
Words 1804
Pages 8
Ashwin Venkateshwara
FMSC 111
December 11, 2014 Final Paper Introduction Credit Card debt and college student debt are problems that must be addressed now. We are seeing to many people suffer from both since they are misinformed and not educated about either. I got my first credit card when I was 18 years old. My parents taught me to be careful with my card and if I wasn’t they would cut me off immediately. Unfortunately people are now getting credit cards earlier and parents are not teaching kids how to use credit cards correctly. According to a study, “50.9% of students had debt before college” (Jones 2005). This means over half of the people entering college already are in some type of debt. Students must be educated before college so we can alleviate the amount of students in debt. Graduating students are “leaving college with $20,402 in education and credit debt” (Robb and Sharpe 2009). This results in people trying to dig themselves out of debt for their whole life. The average student also has “4.25 cards in their name” (Davidson, 2004). This is part of the reason why students are accumulating so much debt since they don’t know how to properly manage credit cards. This is because students have a low degree of financial literacy. This means that students don’t know the true value of money and as a result spend more than they have. We can see this by the amount students are using their credit cards. Not only are students getting in debt, but it is also having social impacts. The social impacts are students ruining their relationships with their families and even friends. The economic impacts are harsh for students because they can’t even make any big purchases since there in debt. According to Sallie Mae, “In 2004, students owed on average $2900 whereas in 2009 this figure soared by 78% to $4,100 (SallieMae 2009). The US congress implemented the

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