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Short essay on ways of increasing financial literacy
Short essay on ways of increasing financial literacy
Chapter 25 - 26 fINANCIAL lITERACY
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In Arianna Huffington’s “The Credit Card Debt Crisis: the Next Economic Domino” she elaborates us on the steady rise of credit card holders and the very apparent rise of credit card debit in the U.S. She also talks about the number of credit card defaults and how they were on a rise in 2009 peeking off at 10% the highest for that year.
Huffington directs most of her attention towards JPMorgan Chase, the nation's top credit card lender who in 2009 began putting a $10 charge on card holders who have a large balance on top of the interest they already pay. Most credit card companies have already raised interest rates on the majority of its card holders by 3 percent even the ones with good Credit standings. Huffington also stated that “For years, credit card companies have been fattening their bottom lines with an ever-widening array of fees, Late fees, cash-advance fees, over-the-limit fees, In 2007, lenders collected over $18 billion in penalties and fees” (7).
She adds that “Discount rates for banks are at an all-time low, yet few have passed these rates on to the consumer” (14) in this blast to the banks she also brings in the mortgage crisis and its parallel similarities to the credit card debt crisis. She accuses the banks of "gouging," saying, "the list of questionable actions credit card companies are engaged in is lengthy and disturbing"(16).
Huffington’s article argues that the credit card companies and banks are legally robbing people of more money then what they borrowed or owed. The irony of the credit card crisis is that the financial industry laid the foundation for much of the trouble we are seeing with its full-throated and deep-pocketed support of the cynically named Bankruptcy Abuse Prevention and Consume...
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...A greater percentage of students that have used this type of financial program have been successful rather than those, which don’t account for the money that they spend (ASEC, 2005). Having a long-range financial goal can help you all throughout life. That is the importance of establishing a good long-term financial plan.
Works Cited
Arianna Huffington “The Credit Card Debt Crisis: the Next Economic Domino” The Huffington Post Business Feb 24, 2009 May 14, 2010
Jill M. Norvilitis, Phillip Santa Maria “Credit Card Debt on College Campuses” College Student Journal NI Sept, 2002 10+. Print May 14, 2010
Robert D. Manning “Credit Card Nation: The Consequences of America's Addiction to Credit”
New York, NY: Basic Books, 2003, Print.
Loree, Monty “Credit Card Debt, Bankruptcy, & Personal Finance for Doomers” United Debt Experts YouTube 1 yr ago. Webcast
One year ago, on September 8, 2016 the Consumer Financial Protection Bureau(CFPB), the Los Angeles City Attorney and the Office of the Comptroller of the Currency (OCC) fined Wells Fargo Bank $185 million, alleging that more than 2 million bank accounts or credit cards were opened or applied for without customers' knowledge or permission between May 2011 and July 2015. This essay will discuss the Wells Fargo scandal by explaining how the event happened and describing how the organization approached handling a response to the crisis. This will be seen, firstly by describing the how the scandal happened, and what were the causes, secondly by discussing the reaction of the company in front of the situation, how they dealt with the crisis and then
Through the use of statistics, expert testimony, appeals to emotions, and a few comparisons, Scurlock tries to convey his message, saying that because the lending industry’s main concern is maximizing profits, they have made it impossible to not have a credit card and avoid being taken advantage of. He accomplishes his goal of clearly relaying his argument to the audience with the high amount of credible support he provides.
Martin and Lehren’s article “A Generation Hounded by the Soaring Cost of College” addresses the issue faced by current and former college students dealing with large amounts of debt due to student loans. The article presents the reader with stories of former college students who have either graduated or dropped out, and their struggle to pay off their student loans. The article also talks about issues such as students not being informed about high amounts of student loans and why student debts have increased. Martin and Lehren also make the issue of student debt more intimidating by giving examples of high amounts of student loans students have had. The article gives a very hard reality check to anyone reading as to how bad the problem of student debt is.
Timothy J Penny, Steve Schier. Payment Due: A Nation In Debt, A Generation In Trouble
As of today America’s national debt is 18 trillion dollars and approximately 5 trillion of that is held by foreign countries including China and Japan. In the last few years we seem to hear more about balancing the country’s budget and politicians raising the debt ceiling so we can pay on this debt. How have we gotten into such an overwhelming and complicated problem with our nation’s money? Ironically the same can be said for our individual household debt as well as making the same mistakes and trying to find creative ways to be accountable to our financial responsibilities. Teaching the basics of personal finance n our schools can culturally change our financial practices, leading to a more financially literate public and a stronger, more stable, America. If the younger generations can become more financially savvy, then there is an opportunity for our nation as a whole to become less dependent on debt to survive.
...hew , and Debbie Cochrane. "Student Debt and the Class of 2012." Institute For College Access and Success. December (2013 ): n. page. Web. 12 Dec. 2013.
Clingman, J. (2014, May 05). Time to bail students out of $1 trillion debt. University
Kovak, Marc. “Survey suggests credit card companies unfairly target college students.” 31 March 2013. ProQuest. Mira Costa College Library, San Elijo. 15 Oct. 2014.
Mullard, M. (2012). The Credit Rating Agencies and Their Contribution to the Financial Crisis. The Political Quarterly, 83, 77-95
Denhart, Chris. “How the $1.2 Trillion College Debt Crisis is Crippling Students, Parents, and the Economy.” Forbes. 7 Aug. 2013. Web. 13 Mar. 2015.
We now live in a society where kids start their adult lives “in the red”, as their debt exceeds their income. (Draut, 2005) 60 years ago this wasn’t the case, as told by Studs Terkel in Hard Times-An Oral History of The Great Depression, “I had no idea how long $30 would last, but it sure would have to go a long way because I had nothing else. The semester fee was $22, so that left me $8 to go.” (Turkel, 1970) Imagine that! 60 years ago tuition was $22 dollars a semester! Furthermore, 45% of adults under 35 state they find themselves resorting to credit card use for basic living expenses like rent, groceries and utilities, (Draut, 2005) adding to their mounting debt. This use of credit puts them into an entirely different category of indebtedness: survival debt. (Draut, 2005) Imagine being forced to borrow to live! (Draut, 2005) If a car breaks down or someone gets sick, the only option available is using a credit card. (Draut,
In the Spring of 1949, Alfred Bloomingdale, Frank McNamara, and Ralph Snyder came up with a new plan for a modern type of credit card. While out to lunch one day in New York, the President of the New York Credit Card Company Frank McNamara had forgotten his wallet at home (Evans 53) . He had a thriving business yet credit cards at the time were only given to selected people. The first modern credit cards was introduced by Diners Club Inc. because of this. The modern day credit card is a small, plastic, rectangle, more than three inches. There is an account number and a name that is embroidered on the front. The first credit card did not look much like what credit cards look today. They were made out of paper not plastic, and they weren’t cards they were a lot like a tiny booklet that had all the same information the modern day credit card has now(Weiss 38). The modern day credit card can carry up to a $200 line of credit meaning you can buy anything you want at that certain time and pay it back at a later date such as months or a year after that time. Some companies require you to pay the full amount of your charge on the card at once, but some allow you to pay in small amounts. In order to apply for a credit card you must be at least eighteen years of age and if you are not you must have an adult sign the paperwork to apply for one. Prior ...
Credit cards are something that are almost needed in everyday life now, as most dont have the money available to purchase a car or house and so need credit, thus needing credit cards to help build that credit. Those cards are hard to handle, and receiving applications in the mail daily, and commercials appearing on television don’t seem to make the struggle of staying away any easier. This starts to spark an interest. So people begin to think, "I think I 'm responsible enough to get a credit card, I 'll only use it for emergencies." Then the application process begins and it may take a couple times to finally be approved for one. This only makes it worse, of course, because realizing how long a credit card wasn’t applicable to life, but now
Reed, Matthew et. al., “Student Debt and Class 2010” Project on Student Debt. The Institute for College Access and Success. Nov. 2011. Web. 12 Nov. 2011
The "subprime crises" was one of the most significant financial events since the Great Depression and definitely left a mark upon the country as we remain upon a steady path towards recovering fully. The financial crisis of 2008, became a defining moment within the infrastructure of the US financial system and its need for restructuring. One of the main moments that alerted the global economy of our declining state was the bankruptcy of Lehman Brothers on Sunday, September 14, 2008 and after this the economy began spreading as companies and individuals were struggling to find a way around this crisis. (Murphy, 2008) The US banking sector was first hit with a crisis amongst liquidity and declining world stock markets as well. The subprime mortgage crisis was characterized by a decrease within the housing market due to excessive individuals and corporate debt along with risky lending and borrowing practices. Over time, the market apparently began displaying more weaknesses as the global financial system was being affected. With this being said, this brings into question about who is actually to assume blame for this financial fiasco. It is extremely hard to just assign blame to one individual party as there were many different factors at work here. This paper will analyze how the stakeholders created a financial disaster and did nothing to prevent it as the credit rating agencies created an amount of turmoil due to their unethical decisions and costly mistakes.