Once again, we see why we should have mandatory financial education in this article from CBS about "Generation Plastic", college students fresh from graduation with mountains of not just student loan debt, but credit card debt.
I didn't understand interest and what a high APR was — I really just didn't understand the concept, and it seemed like a good idea — like (I) can't afford it now, but I will pay it off later
These college students are flooded with offers. They get them in the mail, the universities happily let them set up booths on campus, and they get phone calls. It's the same brand loyalty marketing that we see with other products. Children's games feature VISA cards (monopoly now uses 'debit', yet I doubt the new monopoly teaches what happens when you overdraft your checking account). The toys advertise credit cards. Is this surprising? Companies are advertising to children younger and younger, with more kids being exposed to subliminal ads and product placement than ever before (teletubbies, anyone?).
How many of these kids are getting an education to defend themselves against the onslaught of corporate greed?
I would say in a classroom of 20, maybe 1 or 2 of them
Without classes in schools teaching kids about this stuff, they rely on their parents. But their parents aren't giving them this critical information. What defense do teenagers have entering college against companies that offer them free stuff just for signing up for a 'credit card', then all they know is that "Hey, Barbie loved her credit card, I need one too!". Are these kids asking what the card terms are?
Of course not.
I didn't understand interest and what a high APR was — I really just didn't understand the concept