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Spartan Shield

The student news site of Pleasant Valley High School

Spartan Shield

The student news site of Pleasant Valley High School

Spartan Shield

PV’s personal finance class protects students from credit card debt

The average American has over $5,000 in credit card debt and 4 credit cards. Though rewards and cash back are enticing, it can lead people down a path of massive debt and high interest payments. Photo credit to Augusta Free Press
The average American has over $5,000 in credit card debt and 4 credit cards. Though rewards and cash back are enticing, it can lead people down a path of massive debt and high interest payments. Photo credit to Augusta Free Press

Credit card debt in the United States has reached an all-time high of $1 trillion, with the average annual percentage rate (interest) rising above 20.7%. With debt exceeding $5,000 per working person in the United States, classes like PV’s personal finance are educating students on credit cards to prevent misuse in the future.

Many credit card agencies allow miniscule minimum payments, some as low as 1% of the balance, plus the interest accrued on the debt. According to Bankrate’s minimum payment calculator, making minimum payments with this configuration and using the average debt and interest rate previously mentioned, it would cost $13,124.46 and take over 23 years to pay off the debt.

This is an alarming cost and time period, especially when considering student loans, streaming subscriptions, car loans, rent and other monthly payments the average person needs to balance out. Many blame consumerism and “keeping up with the Jones,” but there is a much deeper issue. 

As the Ten Commandments would imply, coveting has always been unavoidable human nature. 

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This is a direct result of Influencers on social media continuing to use and endorse more prestigious brands, trapped in an endless cycle of funding their lavish lifestyles with more credit card debt. This then pushes a message of consumerism onto their followers, who mimic the same cycle of debt. 

Finance and business teacher Rita Brown teaches a 3 credit course at PV called Personal Finance. This class teaches the essentials of saving, spending and investing for the long term to help students understand financial decision making. Brown conveys, “It is difficult to pinpoint one exact cause for the increase in credit card debt, but pundits suggest our ‘Keeping Up with the Joneses/Kardashians’ mentality and the higher-than-usual inflation rates. We spend several days discussing revolving credit (and specifically credit cards) in Personal Finance. We review the Schumer box, a typical credit card statement, variable interest rates, pros and cons, and various credit card alternatives available,” she shared. 

“However, students really don’t understand the ramifications of outstanding credit card debt until they see the numbers.” And by looking at the earlier mentioned Bankrate calculator, the numbers are staggering. Making minimum payments on a $1000 credit card balance will cost a total of $2,300 and take 10 years to pay off, Brown added.

Senior Matt Pischke is taking this course with over 50 other students this year to learn to make smart decisions with his finances for the future. “I think Mrs. Brown did a great job explaining credit cards and how they work. There’s a lot more that goes into a credit card than just having ‘unlimited’ money. You have to think about different fees, rates, and rewards and how they can all affect you,” Pischke expressed.

Senior Ronit Wade, who is also taking personal finance, shared a similar mindset. “I learned credit cards can make you owe a large amount of money and you might not recover if you take on too much debt. I will now be very careful when I’m using my credit card,” he said.

The large APR rates and lack of knowledge about interest can cause massive amounts of debt, so students like Wade are preventing themselves from future catastrophe by understanding how to use credit wisely.

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About the Contributor
Troy Tomson, Site Manager
Troy is a senior at Pleasant Valley High School and is the website manager at the Spartan Shield. He will major in Cybersecurity Engineering at Iowa State University. After school, he leads the Everything That’s Radical robotics team during the first semester, and the Cybersecurity Club second semester. Some of his hobbies include weightlifting, engineering projects, and reading books about economics. Troy enjoys writing about the variety of clubs that PV has to offer.

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    Bella KriegDec 3, 2023 at 11:10 pm

    I love how PV is teaching classes that student’s can really benefit from in the real world especially once they are out of highscool. All of the business classes taught here are really good at having real life situations that student’s will face and helping them learn how to navigate through it.

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