It is estimated that around 20 percent of all people in the sixth form at school have some form of store card. A new survey has highlighted that many of these people are unaware of the details of the card, with around 70 percent of them being unsure what even basic terms, such as APR, mean.
The study was conducted amongst people who are aged between 16 and 18 and it showed that they have a general lack of basic personal finance knowledge. Many of these people will then go on to university and acquire a large amount of debt, still unaware of how finance really works.
APR stands for annual percentage rate and it is the amount of interest that is charged on any credit you may have borrowed on your store card. In many cases, particular store cards will have much higher interest rates than those you will find at a bank, with some being up to 30 percent per year.
There were other terms that the young people were also generally unaware of too, including ones such as credit and equity. Additionally, around 25 percent of the students said they did not know what the term debit meant, despite nearly all of them having a debit card.
The attitude towards borrowing and debt is also incredibly relaxed among young people. Over half of the students thought that debt is something that everyone has at some point, and only one in every 50 of the students thought that being in debt was unusual.
This lack of knowledge has led to many people to call for personal finance to be included as part of the school curriculum. The vast majority of teachers have agreed that financial education should be a part of basic education and they agreed it was not currently being taught as a good enough level.