(NAPSA)—Arecent survey by the Center for Economic’ and Entrepreneurial Literacy (Econ4U.org) revealed an urgent need for increased education on personal finance and economic issues. The survey found an overwhelming number of Americans are unable to answer some of the most basic questions about borrowing, interest rates and even simple math. What’s more, many people admitted to making poor decisions with their own personal finances. The survey showedthat just one in four adults know that if they need a quick $100 to cover an expense, overdrawing their checkor emergency wire transfer. Better personal finance education at all ages can mean betterinformed workers, borrowers and voters. veyed admitted to having over- could not correctly subtract 25 per- ing account is more expensive than a payday loan, credit card advance Even worse, half of those sur- drawn their checking account. A recent study by the Federal Deposit Insurance Commission showed that bank overdrafts are the most expensive form of shortterm borrowing, with fees ranging from 1,067 percent to 3,520 per- cent APR. “Somehow, overdrafting checking accounts became a common practice, particularly among young Americans,” said James Bowers, Managing Director of Econ4U.org. “The public needs to understand that the interest rates and fees on these overdrafts are far more expensive than any other conceivable form of short-term borrowing.” Butit isn’t just short-term loan fees that Americans are unaware of. The survey results revealed a surprising degree of economicillit- eracy on a wide range oftopics. The survey discovered: 54 percent of respondents could not define “subprime mortgage.” 56 percent of respondents could not identify their FICO score as the most important factor in getting a loan. 65 percent of respondents cent from 8. One in three couldn’t calculate 1 percent of 50,000. “Economic illiteracy is at the heart of our current economic crisis,” Bowers said. “As many Amer- icans find themselves knee-deep in mortgages that are far too expensive and that they don’t understand, it’s troubling to see just how widespread our financial ignoranceis.” Americans, Bowers believes, need to be more diligent about understanding their personal finances. Specifically, paying bills late and overdrawing a checking account are preventable financial mistakes. Not only expensive in the short term, these missteps hurt borrowers’ credit ratings, costing them more downtheline. CEEL urges policymakers to commit to increased and expanded economic education atall levels. Learn More You can learn about credit ratings, monthly payments, profit margins, consumer loans and the national debt, and even take eco- nomics quizzes, at the Center for Economic and Entrepreneurial Literacy Web site, www.Econ4U.org.
