We Kansans, leaning a little too heavily upon the crutch of credit cards, seem to be forgetting how to walk financially on our own two feet.
A state-by-state study of financial capability, conducted nationwide by the FINRA Investor Education Foundation, recently showed Kansas lagging 3 to 4 percentage points behind the nation on five of the six assessed credit-card behaviors.
Over the course of a year — when compared with the nation — fewer Kansans consistently paid credit cards in full (36 percent) and more were satisfied to make minimum payments (43 percent). More citizens incurred interest charges from carrying over a balance (60 percent); by missing due dates, many also incurred late fees (29 percent). To round out the disappointing results, more Kansans managed to exceed credit limits (18 percent), earning additional fees.
The plastic cards that enable us to reach higher financially have become a primary method of payment; we use the cards readily but seem ignorant about whether we can afford what we buy. Then, after acquiring our wares by credit, we exhibit behaviors that seem consistently irresponsible and haphazard.
When credit cards were a new concept, people acted with caution, considering how payments would be made. Now, many fall prey to the difference between reality — bank account balances — and all the offers and bargains out there. When due dates come, these individuals must fumble around for money to soothe their debts.
We lean into our crutch as interest charges and late fees add to our burden.
Somewhere along the way, we lost the wonder and appreciation for credit at its best. We drifted away from the goal of borrowing healthfully — enabling large purchases with well-calculated intent to pay back within a reasonable amount of time. Today, it seems that the ability to have what we want — right now — has drowned out the voice of reason telling us to hold back from unnecessary debt.
Furthermore, we have set aside the motivation to learn, and pass on to future generations, the prudence and responsibility required for financial decision making. Teaching credit-card responsibility has not been a high priority.
Below-average performances on the capability study call for change. To lead healthier lives — and ensure such for our children — we need to learn for ourselves, to teach and to act upon financial responsibility.
All of us, regardless of knowledge level or financial past, can take practical steps today to better equip ourselves and our youths financially for the future. Please join organizations such as the Kansas Council on Economic Education (www.kcee.wichita.edu) in working toward the vision of a more financially literate and financially responsible state.
Let's learn what we need to know and act upon it, using credit as a well-considered tool for good rather than a debilitating crutch.