Of course reading, writing and arithmetic are important, but there is one course that I think every single student should be required to pass before graduation high school… Banking & Credit 101. I’ve worked in the banking industry for about 12 years. There are certain situations that I see all the time.
1) They get their first credit card and go on shopping sprees. Some think they can just pay the minimum charge (not realizing how long it will take to pay it off) and others get so far in debt they can’t do anything to get out of it.
2) They open a checking account and think they can use their debit card regardless if there is enough money in the account or not. Most of the time when I see charged off accounts, it’s because of debit card purchases made when there weren’t enough funds available.
Now, I hear complaints all the time that the problem is that banks charge too many fees, etc. And, I agree that a lot of banks do over charge… but, at the same time, the fees are disclosed and when you sign that signature card, you are saying that you agree to their terms. It is your responsibility to maintain the balance in the account and you are the one that should keep up with your spending. And you should know when your bank will charge you fees so that you can adjust your balance in your register. I’m willing to bet that 75% of people don’t even keep a register. I don’t necessarily write everything down, but I review my account online every few days, so I would know immediately if something was wrong. This is why the bank provides a bank statement every month. It’s not for our benefit; it’s for customers to reconcile with their records and notify the bank if there is a discrepancy.
I work in the fraud department and I’m amazed at how many of our customers call months and even years (yes, years) after a transaction has posted before they claim the transaction was fraudulent. Well people, banks have a limited amount of time to dispute or return an item. We have regulations and rules we have to follow as well.
I actually spoke with a customer recently who was complaining that her account was charged off. She didn’t understand why we closed her account or why she should have to pay us anything. I explained to her that she continued to use her debit card when she no longer had funds in the account. Her account became overdrawn and eventually we closed it. Her response to me was “I know what I’ll do… I’m just not going to pay it”. Well honey, that’s completely up to you, but you are only hurting yourself in the process. Good luck trying to get a bank to open an account for you.
I just wish there was a class that taught young people how important your banking history and credit is to your future. With a bad credit history, you could have difficulty buying a car or a house, even renting an apartment. On the other hand, having a good credit history could allow you save money on interest rates, etc. Unfortunately, a lot of parents either don’t know how to maintain their own credit or don’t take the time to teach their kids. And don’t even get me started on the crazy lottery scams!