919 Eighteenth St., NW, 3rd Floor, Washington, DC, 20006
202-466-8610 – www.jumpstart.org
FOR IMMEDIATE RELEASE
Jump$tart Coalition Survey Shows High School Students’
Use of Plastic up Since 2002
High Use Combined, However, with Limited Knowledge of Risks and Finance
WASHINGTON, DC – September 23, 2008—In its 2008 nationwide survey of high school seniors, the Jump$tart Coalition® for Personal Financial Literacy found that high school students’ use of credit cards is up slightly and use of debit cards has skyrocketed. The increased use of debit cards does limit the debt exposure of young and inexperienced users of plastic. It does not, however, appear their understanding of the risks and finance charges involved in card use has followed suit. So, as parents send their high school- and college-age children back to school, they should prepare them not only for their academic work but also the students’ growing use of plastic while away from home.
In the Jump$tart Coalition’s biennial survey, funded by the Merrill Lynch Foundation, 53.3 percent of the respondents said they have a debit card compared with 35.9 percent in 2002—a difference of 17.4 percent. Credit card use is up also, though not as sharply; 34.7 percent of the 2008 respondents said they used a credit card compared with 32.2 percent in 2002 (a 2.5 percent difference). The survey has been conducted since 1997 on Jump$tart’s behalf by Lewis Mandell, Ph.D., Kermit O. Hanson Visiting Professor of Finance and Business Economics at the University of Washington and Senior Fellow at the Aspen Institute, and his analysis of the survey will be published in a book, early in 2009. Merrill Lynch has funded each of the previous Jump$tart surveys since 2004, including an online college survey in 2008.
“The long-term health of our economy will be determined by how well we educate young people today,” said Eddy Bayardelle, president of the Merrill Lynch Foundation. “And so we partnered with a leader in youth financial education, the Jumpstart Coalition, to survey students’ knowledge of personal finance and identify areas where they’re struggling, enabling financial education supporters to direct our resources accordingly.”
In the same survey, 87 percent of the students did not know the maximum amount they could be forced to pay under federal law if their credit card was stolen. More importantly, more than half of the respondents did not know that paying off a credit card more slowly will result in higher finance charges.
“There seems to be significant confusion about the risks for both credit and debit cards and interest calculations for credit cards,” said Laura Levine, executive director of the Jump$tart Coalition. “When a card is stolen, students should know what to do and how quickly they must report a theft to the issuing company. They should also know that paying only the minimum payment each month will accrue significant finance charges to their credit card bills.”
Although the Jump$tart survey did not test students’ knowledge of recommended procedures, Jump$tart and many of its partners urge parents to make sure young people know what to do—before they sign the back of their card and use it for the first time. For more information, parents should consult the Jump$tart Clearinghouse (see below), which contains materials from national partners and others that could prove helpful in approaching and understanding the subject.
The Jump$tart Coalition® has grown to include more than 180 national partners and 48 affiliated state coalitions. The Jump$tart Clearinghouse, which lists more than 700 titles of financial literacy materials available for all, can be found at www.jumpstartclearinghouse.org. A map of state-by-state financial education requirements can be found at www.jumpstart.org under “Legislation.” More information about Jump$tart and its biennial survey can be found at www.jumpstart.org, including a media press kit in the “News” section.
About Merrill Lynch's Philanthropy
Merrill Lynch was founded on the idea that the world is full of opportunity. Opening the door to that opportunity for underserved children and youth is the focus of the firm’s global philanthropy. In 2007, Merrill Lynch giving totaled almost $44 million, with education receiving nearly half of that support. Around the world, Merrill Lynch programs are providing better access to educational opportunities for those who need them most, specifically in the areas of youth financial education, entrepreneurship and global citizenship. Through the dedication of our employee volunteers, free educational resources at http://philanthropy.ml.com, and financial support, we are leveling the playing field for millions of young people to compete and succeed in the global marketplace.
Jump$tart Coalition for Personal Financial Literacy