It won’t help. The real cause is that public school education is so severely underfunded in the US.
It’s not funding, plenty of money gets spent on education. It doesn’t matter to kids that don’t have reinforcement that education matters. Financial literacy specifically isn’t going to help, because it’s too abstract to students that aren’t working jobs, paying rent, and buying their own food.
Teacher: “Lesson 1: have more money.”
Seems fine.
I wonder if we can also teach people delayed gratification. People’s inability to do that is I think a root of a lot of problems.
I remember a little while back reading something about how Financial Literacy was introduced as a way for the banks to avoid regulation, pushing the responsibility to individuals rather than face government pressure to change.
I’ll have to look for the article…
While there’s some truth to this, there’s also a ton of things companies are required to display prominently when lending money. Most people know about the interest rate, but there’s a lot of other numbers just as important to understand.
We had to take that class on our senior year many, many, many moons ago. Back then they taught us that having a credit card was good though. LOL!
I’m not aware of any harms from using a no-fee credit card that you pay off in full each month. You get 1% - 5% back, and it’s easier to deal with fraudulent charges.
If you have a credit card with a $25,000 limit, that limit counts against your total even if you are not using it. For example, if it is determined that you can sustain mortgage debt of a maximum of $400,000 at current interest rates, you will not qualify for that amount because you also have an open credit card with an available balance of $25,000 at a significantly higher interest rate.
EDIT: You can only decrease what you owe on a loan but a credit card is an open line of credit that you can max out at any time. Because of this, the entire credit line counts against you when evaluating your debt.
Do you have a source for this? My understanding was only credit card balances mattered.
Key word is “a”, as in one.
Although you generally are solid in 2 to 4 range, the more important thing as it turns out is (aside from prompt payments) to make sure the credit limit is high. Those store cards with 300 limits are looked down upon.
I have about 10 of them because cancelling is considered bad. I product change to another card when the annual fee hits to avoid it, and generally get a few cards a year to take advantage of bonuses.
They still keep giving me 5 figure credit limits on every one, for reasons I can’t explain
A big ding to your credit score itself is actually a low amount of lines of credit, I think 10+ is considered “good” which is ridiculous
Apparently I was wrong, and learned something new today. Your score comes from:
35% - payment history (everything paid on time, etc)
30% - amount owed
15% - age of credit history
10% - how many new lines of credit
10% - credit mix (just credit cards vs credit cards, auto loans, etc)
My teacher in 2019 tried to convey this to us in economics class too. But to this day I still refuse.
