Credit Cards and compound interest pain

Why is it that every time I’m reading some financial advice column, they say something like:


Can the human brain not be taught to understand the pitfalls of the credit card industry? Most financial columnists seem to think this is about as likely as Farleigh-Dickinson winning the NCAA basketball championship this year.
Luckily, this college professor is a little more positive:

I taught a unit on financial mathematics. I found this section a lot less interesting than the rest of the course, but taught it with the same enthusiasm that I bring to all of my classes. And something strange happened: for the first time ever (other than at camp), my students were more interested in a topic than I was. One kid, who sat front row centre, summed it up: “This stuff is useful.”

(Via this weeks’ Carnival of Education)

This has parallels to the sex education debate, but most people aren’t going to like the ones I draw. Telling students about the ways to stay safe while doing things does not mean you are forcing, or even encouraging, them to do anything, you are just giving them the tools to protect themselves if they so choose. So, spending a week or two in high school explaining why paying the minimum payment on a $2000 credit card bill every month with an APR of 19.9% isn’t going to get that balance down just might be a good thing.

I will grant that some people simply cannot control themselves when given the temptations of a seemingly limitless source of cash and they should follow the financial planner advice, but surely not every twentysomething falls into this category.

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