Why Don't We Teach Money Management
Posted on 31. Dec, 2008 by Brad in Economy | Twitter: @bradhart |
Another report out this week showed credit card companies are pounding the pavement harder than ever where college students are concerned. The number of companies issuing student credit cards are rising despite no one else being able to get credit. I have to ask myself why this is. granted most college freshman don’t have any negative credit to hold them back getting credit cards, but many of them simply don’t have a positive track record either and that is what worries me most of all. Almost no one escapes college free of student loans, and frankly if I were a lender I would be more worried about that than I am current profits. I guess this goes to show the lack of foresight many of these companies have in their marketing department.
If I had to guess these companies think they will be able to sell off all that debt as quickly as they have in previous years. They shouldn’t could on it. First off I doubt their current buyers are going to remain solvent with as badly as the economy is tanking and will continue to tank for the foreseeable future. Even if the US economy picks up most of these debt purchasers are from countries that will take significantly longer to turn around. Secondly federal regulators and congress are all considering measures that would require debt issuers to hold the debt longer than than they currently do. Companies required to hold debt should really think twice about loading down the least able to pay with more than they can handle. In the end lenders need a course in the basics of money management, rather than letting their creative marketing department continue to work with their creative accounting department.
Furthermore if we really were committed to the idea of leaving no child behind we would quit worrying about whether or not students can pass ineffective standardized test, but whether or not that they can demonstrate practical skills like balancing a checkbook and paying their bills with what they have available. Available credit is a great and wonderful tool, but it is only a tool not a state of being.
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chandler@credit blog
22. May, 2009
Money management is not the easy stuff but it can be easy over the time. But we shold learn this because we never know what the economy is going to bring us. There is always a surprise waiting for us when it comes to finance. And it is always not pleasant so money management should be compulsory for everyone I think to maintain a good credit report.