According to a recent survey by GO Banking Rates, many Americans are not well-versed in understanding finance and general financial terms.
For example, when asked “What is a HELOC?,” one-in-five respondents said “HELOC is not a real thing.” However, as the national homeownership rate drops towards 60%, the number of people who have the opportunity to take out a “home equity line of credit” is also shrinking.
Young people, 18-to-24 years old, also had difficulty saying what a “CD” is in financial terms — only 36% correctly answered “certificate of deposit.” Perhaps, that’s because interest rates offered by banks for these savings accounts have been low for longer than these respondents have been adults. They may also be paying down student loan debt (or even attending school) rather than putting money into long-term savings.
Additionally, more than a third couldn’t pick out the names of the three credit bureaus: TransUnion, Equifax and Experian. Consumers should track their own credit scores, to make sure mistakes in their reports aren’t making it difficult for them to borrow at the best interest rates.
For comments, questions or concerns, please contact Bendix Anderson