Parents, students don’t fully understand credit

Students fail three of six questions on credit

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Almost nine in 10 students reported that they are not confident when it comes to managing their money, according to the latest 2014 RBC Student Finances Poll.

While 80% of students who responded said they turn to their parents for advice on big financial decisions, credit appears to be the forgotten dinner-time discussion.

According to RBC, students failed three of six questions on the topic, “but some parents didn’t fare all that much better.” For instance, both students and parents incorrectly thought your credit score is affected by your age, income and gender.

The majority of parents and students agree that it’s important to maintain a good credit rating, but there isn’t enough financial literacy being passed around the table so that students have a healthy understanding of how to make smart financial choices.

The bank reported that 71% of students are worried about not having enough money to cover all their expenses. More than one-third wished they knew the cost of small extras required, revealing just how daunting the task of paying off student loans and other costs can be. Just over half of the parents polled were aware of this fear.

“Many students get their first credit card when they begin post-secondary education, so this is the time to educate them on responsible credit use,” Melissa Jarman, director of student banking at RBC, said in a press release.

 

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