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Latina Lista: News from the Latinx perspective > Palabra Final > Economy > Online site aims to break the cycle of financial illiteracy among young Latinos

Online site aims to break the cycle of financial illiteracy among young Latinos

LatinaLista — Financial literacy is an issue that is increasing in importance among the Latino community as the economy still teeters, jobs are still lost and people are still losing their homes.

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For too long, Latinos, and those who speak a language other than English, have been considered fair game by unscrupulous credit card and mortgage companies

A 2007 La Raza study cited data showing that 12.9 percent of Hispanics have a credit card interest rate greater than 20 percent. Just 7.5 percent of Caucasians had cards with a rate that high.

It’s reported that part of the Credit CARD Act of 2009 requires the Government Accountability Office’s Comptroller General to examine whether there is a relationship between English proficiency and financial literacy and if so, how non-English speakers in the United States are affected by that when it comes to conducting financial transactions. The report is due no later than May 22.

While language is certainly a factor for some when it comes to financial illiteracy, it’s also true that a plain lack of knowledge also plays a big part. Unfortunately, if parents are financially illiterate, chances are so are their children.

That’s why the site DebtFreeU.org is reaching out to young people to break the cycle of financial illiteracy.

DebtFreeU.org, an all-English site, provides “free, non-commercial financial literacy information, tools, and curricula for students and young adults.

The site has:

  • Over 115 articles covering how to pay for college, budgeting, managing loans and more.
  • Calculators and tools to help students investigate college funding and repayment options, develop budgeting skills, and plan for their financial futures.
  • A blog featuring content crafted by financial professionals, reporting news and tips that keep readers up to date on financial issues.
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The Federal Reserve Bank 2007 Survey of Consumer Finances found that only 58 percent of Latinos had a credit card in 2008 as opposed to 73 percent of Caucasians. But 48.4 percent of Latinos carried debt vs. 46.1 percent of Caucasians. The report also found a large gap of wealth between Caucasians and Hispanics.

It’s obvious if financial practices are to improve among Latinos, it’s time to start educating the next generation who will not only be more educated and holding better paying jobs, but earning higher salaries — which make them prime targets of companies that will do what it takes to get their business and their money.

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