April 21,2009
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Antiquity of Credit Card Debt, Pt.2
Trying to get a handle on it.The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) which came into effect in October, 2005, make it harder for consumers to default on credit card debt. The Act contains provisions forcing borrowers to participate in financial education. The goal is to prevent the debtor from falling back into the same trap that landed them in court to begin with. Statistics have demonstrated that more than 50% of bankruptcy debtors file a second time. The BAPCPA steps which force the borrower to participate in financial education, is an important provision of the Act. However, the need is much greater to educate consumers before they find themselves buried in debt. The premise of just arbitrarily handing out credit cards to consumers without first providing them with the skills needed to manage them needs to change. Nothing has been more evident than the aggressive marketing taking place on our college campuses. Reports indicate that the average undergraduate student has the highest credit card debt since data became available in 1998. Further research indicates that student average debt amount rose to $3173 in 2008, a 46% increase from the number in 2004.
Consumer advocate groups have been appealing to lenders and law makers to become proactive in assisting consumers in becoming financial health savvy. Efforts have begun by passionate educators to initiate financial education for children in elementary and middle high ages; however, with curriculum already being squeezed, time is limited. With financial issues being a part of everyday living, children have become more of an important element in retail marketing. Retailers, large and small, have targeted our children as a viable source of income. Many children believe the credit card is the answer in fulfilling their needs. Parents with all good intentions have modeled a consistent use and abuse of credit card usage.
With no provision for financial education in the No Child Left Behind Act, educators are seeking out creative ways to integrate education on managing credit card debt into their daily lesson plans. Despite their honorable efforts, it has generally had to take a backseat to more important fundamental instruction. It goes without saying that consumer advocates are faced with a greater challenge than ever before in soliciting government aid.