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Thursday Jul 13, 2006
A generation of bank slaves
A new survey tells us something most people under 30 know already: that most young people live in a permanent state of debt. Apparently three-quarters of 18-29 year-olds have an overdraft facility, averaging out at over £650 per person.
The banks are rightly being seen as part of the problem. The moment you reach 18 you are encouraged to take on overdrafts and credit cards; some banks even offer free gifts such as i-pods and music vouchers to hook in the new 'customers'. Meanwhile, financial literacy is at best patchy in most schools so you have a a generation of young people who are low on money skills being offered all kinds of opportunities to rack up debt.
The issue of debt comes up all the time on TheSite.org discussion boards. Credit cards, overdrafts and student loans all make it difficult for young people to make the starts they want to in their 'adult' lives. This is from one thread:
"I have roughly 2 grand on a credit card and a 500 quid overdraft. The interest is really starting to kick in on the credit card and all I want to do is get rid of the damned thing. Trouble is, no matter how much I wanna pay it off, something else always seems to get in the way of me paying off a great amount. Thing is, now I'm getting a bit older as well, I'm starting to become conscious of the fact that i've never saved a penny in my life and some day soon I'm gonna need money to set up with my own place and live my own life etc etc, but again, never seem to have any money left to save."
The survey also says that over half of young people have gone over their overdrafts and had to deal with the consequence of the outrageous penalties that the banks hand out. It's good to see some people fighting back by reclaiming charges from the banks. But what's really needed is a more responsible approach from banks in the first place in the way they offer services, particularly to those with no financial history or experience.
Posted by Dom Waghorn ( 1:55 PM ) Link to this post Comments[1]
It's unfortunate but not every one comes from a wealthy background. That's why if you happen to know a young college student, it's best if you can give them some financial advices so that they don't go out and get themselves into debt.
They won't understand the ramifications until it's too late.
Posted by Credit Card Phil on July 14, 2007 at 04:23 PM GMT+00:00 #