Why are people so dumb with money?

I overheard the parents of my best friend talking about money last night. They were complaining about how much interest they are paying on their credit card.

Seems they used their card to buy stuff when they didn’t have the ready cash to do so. But they loaded so much debt onto the card, they didn’t have a hope in paying it off in full at the end of the month (which would have meant they weren’t charged ANY interest).

But that’s not the dumbest part. They missed a monthly repayment. That instantly increases the rate of interest they pay… they’re now being charged something like 24% on the outstanding balance!

And they’re puzzled as to why they don’t seem to making progress by paying just over the minimum monthly repayment… Doh!

I wonder if they can remember what stuff they bought in the first place?

Ashley Stasher

One of the Money Mindset Mob - empowering teens to master their money

Tags: debt, interest, teens and money