Teaching Teens to Adopt Debt Culture
Teenagers are growing up believing that getting into debt is a way of life, a charity warned yesterday.
The Personal Finance Education Group (PFEG) revealed that one half of all teens are in debt by their seventeenth birthday. Concern has been expressed by many organisations over the teen’s “worryingly laidback” attitude towards their spending and accumulated debt.
Wendy van den Hende, the PFEG’s chief executive, said that their survey showed “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,” she said.
The survey polled more than 1,000 14 to 18 year-olds found some startling trends. One disturbing trend is that 25 per cent of teenagers believe that a bank overdraft is extra money for them to spend. In effect, these teens view an overdraft as a grant.
One in five teenagers believed a credit card is ‘free money’ allowing them to buy things they cannot afford, rather than an unsecured loan that must be paid back. Most alarming is the fact that one in 20 teens of believe that there was no need to pay back credit card debt at all.
There are prepaid credit cards marketed directly to teenagers. These are topped up by their parents and used in the same manner as credit cards. Economists believe that these cards result in a warped view of credit cards, and may cause irresponsible spending habits that will follow the teen into their later life.
Source: 1stopfinanceshopuk 28.03.07
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