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Most Undergraduates are Financial Illiterates

Sounds a little harsh, but as the following article points out it may be true. The average college student has 6 credit cards and 21% of undergraduates are carrying a balance of between $3,000 and $7,000.

http://www.investmentnews.com/article/20120304/REG/303049978

To say this is alarming is an understatement. Many of those undergraduates are going graduate with high credit card debts in addition to a large student loan debt which, unlike credit card debt, cannot be discharged in bankruptcy. I particularly enjoyed the author’s description of these students as living in a weird state of suspended reality about their precarious financial circumstances. I believe it to be true that many young adults do not understand the uphill battle they will face in paying off these credit card debts over time. And if they’re not careful, those bad habits will continue well beyond college and lead to bigger debts in the future. The article suggests that financial advisers reach out to to the children of their clients to educate them on the pitfalls of credit card debt.  Not a bad idea.

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Kevin Fallon McCarthy is the McCarthy Law PLC’s managing attorney and an experienced Phoenix debt attorney. Mr. McCarthy has also worked as general counsel for a large corporation. He has corporate counsel experience in human resource matters, general corporate governance, and union class action litigation.