Getting Smart about Credit

By Kate Young

Is a bank still a bank if the consumers are all insolvent? That’s a question, perhaps, for philosophers and economists. As marketers, though, we have a vested interest in the financial health of our communities. Even if that means reaching out to consumers when they’re still young.

Unfortunately, the younger generation, by and large, has been having a rough time financially. An estimated 75% of millennial college graduates are facing student loan debt, with an average balance of $29,000. And 57% say they would finance an emergency with their credit card. Such debt burdens, combined with other financial challenges, have caused them to delay getting married, having children, and buying a home.

Will the post-millennial generation fare any better as it comes of age? It’s hard to say. But the general consensus among government, industry, and educational stakeholders is that a significant financial literacy gap exists among Americans of all ages—but especially the young. And it threatens not just individuals, but the financial sector and the U.S. economy as a whole.

Bankers are perfectly suited to help.

In a recent press release, Comptroller Thomas Curry of the OCC said, “Whether it’s through income tax assistance sites and tax time savings programs, or youth and age-friendly banking programs, national banks and federal savings associations are important partners in increasing the financial knowledge and skills of their customers.” And the folks at the ABA couldn’t agree more.

“Bankers live and breathe the world of finance and we believe no one is better suited to take on financial education,” said Jeni Pastier, senior manager of financial education for the ABA Foundation. “We’re proud that bankers continue to make this a priority for their communities and that ABA Foundation resources help them do so.”

Help your future customers get smart about credit.

Get Smart About Credit is just one of the financial literacy initiatives sponsored by the ABA Community Engagement Foundation. This national campaign supports and supplies bankers with materials to educate young people on how to use credit wisely. The program specifically targets consumers when they’re still in high school—before they start receiving credit card offers by the fistful—even before they’ve signed the dotted line on any student loans.

The official date for Get Smart About Credit Day is October 20, 2016, but events take place throughout the school year.

The day Monroe Bank & Trust took its congressman to school.

Earlier this month, Monroe Bank & Trust (MBT) of Monroe, Michigan partnered up with Congressman Tim Walberg, to celebrate Get Smart About Credit at nearby Milan High School.

The presenters at this special event talked to students about the importance of:

  • Investing early
  • Compound interest
  • College degrees
  • Making wise choices concerning student loans
  • Not being overextended on credit or housing decisions as they start out in life

“Managing money is a critically important life skill, and quality educational opportunities will help students develop sound financial habits,” Congressman Walberg said. “What these students learn now concerning student loans and budgeting will serve them well in their future decisions.”

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It’s important to note, however, that this effort was not a one-off, or even just an annual occurrence. “Financial literacy is something we focus on 365 days a year,” said Jennifer Tucker, AVP and financial education officer at Monroe Bank & Trust.

It was all part of the MBTeach High School Financial Literacy Program, an interactive, web-based financial education program that MBT offers area high schools in partnership with Washington, D.C.-based EverFi, Inc. Since the program began in 2011, the curriculum has reached over 4,200 students 20 schools across Southeast Michigan—at no cost to the schools or the taxpayer.

MBT also supports a robust financial education suite called MBTeach, which includes:

  • In-school student banking at 25 elementary schools
  • Adult workshops hosted by 45 local businesses and non-profits
  • The annual Green Apple financial literacy awards where teachers, organizations and team members are recognized for their efforts in the financial education arena

Where do you start?

You don’t need to have a fully developed financial education office to get involved in Get Smart About Credit. You can register for free to receive access to ABA’s Get Smart About Credit resource page. There you’ll find school and parent outreach letters, presentation lessons, student activities, communication tools, and promotional materials.

And mark your calendar: The ABA Foundation will participate in a Twitter chat hosted by Experian at 3:00 p.m. EDT on Wednesday, Oct. 19. The chat will be an opportunity for bankers across the country to ask questions, share best practices, and discuss new ideas with peers for educating customers about credit. To participate in the chat, log on to Twitter and follow the hashtag #creditchat.

Kate Young is the content editor of ABABankMarketing.com. Email: kyoung@aba.com

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