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Financial Literacy

Financial Literacy

What the Facts Mean

• Credit cards are such a big part of the money landscape in America, we can hardly imagine a world without them. We’re using less and less cash…This old guy recently was asked by his little grandson, “What’re those pieces of green paper with the old guys’ faces on them?”
• Credit cards are widely, widely used and involve many, many zeroes after the number.
• Credit cards are the most expensive way to borrow money (other than the guys who let baseball bats do the talking)
• We’ve racked up crippling debt—money that we have to pay back, money that costs a lot to borrow.
• Credit cards are an extremely handy money-exchange tool, but lots of folks have accidentally, ignorantly, and/or irresponsibility chopped off their fingers with that same tool.

Still, even today, not everyone has credit cards; about 1/3 of Americans don’t.

• Some people can’t get credit. The bank doesn’t trust their promise to pay because they

o Don’t have enough income
o Don’t pay their bills on time
o Don’t have a credit history
o Have a bad credit score
o Are illegal aliens who do not officially “exist”
o They’re under 18
o They’re under 21 and their parents won’t co-sign for it

• Others choose not to carry a credit card because

o It’s really easy to overspend with credit cards; studies show we spend 20-30% more on any given purchase when we’re whip out the plastic.
o They makes things cost more - Jonesy buys a cool new black and white paisley shirt. Puts it on a credit card and doesn’t pay off the entire amount at the end of the month, that $35 shirt winds up costing him $100 5 years later when he’s finally paid it off.
o Some have declared bankruptcy and are no longer allowed to have them.
o Others just prefer the feel of cash in their hot little hands.

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