Financial Knowledge of College Students is Related to their Credit Card Spending

by San Antonio Attorney

According to research, students who have the least knowledge are almost two times likely to max out their credit cards than students with mid-level knowledge. Moreover, they also are inclined to take more cash advances and become delinquent in paying their credit card bills. Such behaviors are linked to financial problems.

Furthermore, students who have midlevel knowledge are more prone to take cash advances, max out their credit cards, and miss payments, than students with the highest level of knowledge, the study shows.

According to Cliff Robb, the researcher who wrote the Journal of Family and Economic Issues published in 2011, better behavior is linked to higher knowledge.

Prof. Robb’s research was based on the responses of over 1,300 undergraduate and graduate students in the University of Alabama. To establish the financial knowledge of the students, they were asked to answer introductory-level questions about costs related to making minimum payments on credit-cards. Also, they were asked whether or not they use credit cards in a manner that may cause late charges, increased borrowing costs and other unfavorable consequences.

Even though the research highlighted a substantial connection between behavior and knowledge, it did not confirm that a lack of education leads to misuse of credit-card or the other way around, according to Prof. Robb. He said that what is obvious is that when a lot of students get to college, they are suddenly forced into the situation of dealing with lifestyle expenses and student loans, which they are probably not ready for.

Prof. Robb said that campuses have initiatives about disseminating awareness on alcohol abuse, eating healthily, social stress, and grade stress. However, there is almost no initiative to teach students about financial stress.

A lot of financial experts say the most effective way to educate students regarding financial obligation is to provide them with practical experience before they go to college.


–  Many consumers who have unpaid credit card bills are being harassed by debt collectors. A Bankruptcy Attorney San Antonio can help you stop them and protect your rights under the debt collection laws such as the Fair Debt Collection Practices Act (FDCPA).

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