Survey Says: Teenager Credit Cards - Perfectly Stupid
An article in the Fort Wayne News-Sentinel reports on a Junior Achievement poll stating that one of every 10 teenagers uses credit cards and that some are as young as 13! I wonder if the kids are paying their own bills or if mom and dad are paying most of these?
According to Junior Achievement and the Allstate Foundation, it would take a teen making minimum payments nine years and almost $2,000 in interest fees to pay off a $1,000 card balance at an 18 percent annual interest rate.
Since it takes 10 years to clear your credit once it has gone bad, is it any wonder that so many people under 25 file for bankruptcy?
Survey Highlights
- Only 10.3% of respondents indicated that they own credit cards, but as teens grow older, incidence of credit card ownership consistently climbs. Among teens ages 13-14 only 5.0% reported owning credit cards. At age 17, the percentage of ownership climbs to 9.8% and then doubles again to 19.6% for teens 18-or-older.
- Only 4% of students reported being victims of credit card fraud.
- Of teens owning credit cards, 83.6% reported paying the balance in full each month. Only 0.7% admitted to occasionally skipping payments. The minimum payment is made by 15.7% of teens.
- The most frequently charged item is “clothes,” with 67.1% of teens making this purchase with their credit cards.
- Teens are not reluctant to use the Internet to make purchases. Results indicate that 59.3% of teens have made online purchases with their credit card.
- Do teens make huge purchases on their cards? Not according to the I-Poll results. Nearly three-fourths (73.8%) charge $100 or less per month. Included in this percentage is the 44.8% who charge less than $50.
- Almost a quarter of all teens (22.7%) pay for less than 15% of their own expenses. Those self-sufficient teens who pay 76% or more of their expenses represent only 20.1% of students surveyed. As teens grow older, they take responsibility for paying a greater share of their expenses.
If I only knew now what I knew then……. Know one ever told me that starting at age 25 if I saved $65 a month by age 65 I’d have a million dollars. And know one ever really taught me the importance or the principle of savings. Really, if I had to choose what my parents taught me about money—how to save it, how to make it or how to spend it—I’d probably have to say, what they taught me the most is how to spend money.
For many preteens and teens today, although bright, educated and smart, they fail when it comes to basic, simple money management skills. 4 out of 5 teenagers can not tell you what goes on inside a bank. And 73% didn’t know that a stock would yield more over time than a savings account, according to Jump $tart. Why? Because finance and money management are not being taught in schools or is just now starting to be taught in certain areas of the country in high schools. Plus, high schools are experiencing the largest dropout rate in their history—1 dropout every 7 seconds or 1 million drop outs in 2005. Plus, a minimum wage increase has just been turned down and wage stagnation is at its worst in 30 years.
If you don’t take the time to teach your children the principles of money NO ONE ELSE WILL! MoneyMoney101 for preteens and teens is coming! Stay tuned.
Comment by MoneyMoney101 Simple Money Management — August 14, 2006 @ 11:20 am