Finance 370 (Acct 473) Exercise Four Credit card debt is the fastest growing debt among adults aged 18-24. It has doubled in the last twenty years. College students get in the habit of using debt and this habit just gets worse after graduation. College freshman typically have a balance of $1,000 on their credit cards. This number rises to over $4,000 during their senior year. Credit card debt is in addition to student loan debt and car loan debt. The rationalization for this debt is the belief that it will be paid off when they graduate and get a full-time job. There are many advantages to having credit cards. They establish a credit history, are convenient, and are useful as in emergencies. The downside comes with the overuse of credit. Misuse of credit harms your credit history and can reduce your standard of living in future years. This is not new information for anyone in the class or college students in general. Why do we abuse credit? Why do we get into trouble through the overuse of credit? We know better so why do we do it? Education alone is clearly not sufficient. Education about the harmful impact of credit overuse is out there; it’s in the news every day. Education is not changing behavior. Education about the harmful impact of smoking didn’t change behavior for decades. Knowing it’s harmful is not enough. How do we change behavior? Pick a group of people that you identify with such as a club, team, class, or organization and design a program to change behavior. Explain how you will get this group to reduce their reliance on credit card debt. 1. 2. 3. 4. 5. Define the problem Describe how you will measure results Describe your action plan Describe similar programs in other locations? Why do you expect it to work? Limit your paper to two pages. - Due date – October 28
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