The Role of Financial Education in Preventing Credit Card Debt: A Framework for Schools and Communities

Abstract

Many individuals, particularly young adults and those in underserved communities, lack essential financial education, leaving them ill-equipped to manage credit cards and other financial products. The study examined the role of financial education in preventing credit card debt: a comprehensive framework for schools and communities. The study’s specific objectives were to: examine the importance of financial education in mitigating credit card debt among young adults and underserved communities; develop a framework for incorporating credit card management education into school curricula and community initiatives; ascertain the long-term advantages of early financial education on responsible credit card usage and overall financial well-being, thereby supporting the broader strategy of promoting financial literacy and demonstrating expertise in creating targeted educational programs. Descriptive survey research design was adopted on a sample respondents of 100 credit card users in Mississippi, USA. Primary data were collected using structured questionnaire. After the descriptive analysis conducted through mean and frequency, the hypothesis were tested using one-sample t-test. The findings of the study revealed that: financial education is significantly important in mitigating credit card debt among young adults and underserved communities (t-value = 6.401; p = 0.000); the proposed framework will significantly help in incorporating credit card management education into school curricula and community initiatives (t-value = 6.653; p = 0.000); there are significant long-term advantages of early financial education on responsible credit card usage and overall financial well-being (t-value of 8.646; p = 0.000). In conclusion, by equipping individuals with the knowledge and skills to manage credit responsibly, financial education can help reduce the risk of debt accumulation and foster healthier financial habits. The study recommends among others that financial education organizations and curriculum developers should prioritize early financial education initiatives to promote responsible credit card usage and long-term financial well-being.