Answer:

Questions:

• Why do you think that such a high percentage of people carry a credit card balance and pay interest rates over 20%? 
• When did you/do you hope to get a credit card?
  • If you have one, what do you use it for? 
• What strategies can you use to prevent overspending on your credit card and paying lots of money in interest? 

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (Comparecards.com citing American Bankers Association data):

According to data from the American Bankers Association, 43% of credit card accounts carried a balance as some point in Q2, 31% of accounts were active but didn’t carry a balance and 26% of accounts were dormant for the quarter. The number of accounts that didn’t carry a balance grew by 1 percentage point in the second quarter, while the percentage of those revolving a balance fell to the lowest levels seen in two years. While it’s great news that we’re not seeing more people carrying balances, the fact that so many people are carrying credit card debt in generally good economic times is troubling.

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Your students will learn about the credit situation in their community with this interactive from the Federal Reserve. 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.