DURHAM, N.C. -
The study, from the Center for Responsible Lending said it found that young adults and college students age 18 to 24 are paying more than $3 for every $1 borrowed for debit card overdrafts.
Not surprisingly, the study found that young adults are more likely than older adults to use a debit card, and 70% use the cards for purchases costing less than $2. The study suggests one contributing factor to students' financial troubles are the partnerships many universities have with banks. Approximately 100 U.S. colleges have such partnership agreements, under which students' identification cards double as debit cards with their accounts linked to the bank.
The Center for Responsible Lending recommends universities not partner with any bank with what it called "abusive" overdraft fees and that young adults choose financial institutions that will link their checking and savings accounts together for back-up funds.
For info: www.responsiblelending.org.
