FAYETTEVILLE, Ark. — The less college students know about credit card debt, the more likely they are to have lots of credit cards and owe large amounts of money. A University of Arkansas professor and her colleagues have surveyed young college students about their credit card use and family attitudes towards money, and found that family communication about money management and debt influences student choices. The researchers are building an interactive CD-ROM to help parents and students better communicate about money.

"Most of the literature for parents of teenagers addresses talking to kids about sex or drugs but not about money," said Myria Allen, associate professor of communication. Yet multiple studies have linked credit card use to problems college students experience in school, including dropping out, working multiple jobs, filing for bankruptcy and even suicide.

Allen and her colleagues performed two different studies. First, Allen along with Ron Warren and Patricia Amason of the University of Arkansas, conducted interviews with 103 college students. Then Allen, Warren and Celia Ray Hayhoe of Virginia Tech, Lauren Leach of Northwest Missouri State University, Enid Waldhart of the University of Kentucky and Renee Edwards of Louisiana State University surveyed college students from Arkansas, Louisiana, Kentucky and Missouri. They found that almost one-third of the 1,293 respondents didn’t know how their parents managed their credit card debt each month, and one-quarter didn’t know if their parents had a plan for paying off credit card debt.

The researchers found that students who came from families where money was a source of conflict were less likely to talk to their parents about credit card debt, more likely to view credit cards as a source of power and more likely to worry about money. They looked at what they call "coalition" families, where parents and children have conflicting views about money. About one-quarter of the students surveyed reported coalitions in their household, where a parent and child didn’t respect the other parent’s views or the parents didn’t respect the teen’s views about money management and debt.

"People who come from coalition families have unpleasant imaginary interactions with their families. They imagine having negative conversations about money," Allen said. "Coming from a coalition family causes them to have different and less emotionally healthy attitudes towards credit cards and money."

Students with open family communication reported that they depended upon their parents for advice and for emotional and financial support. Two things kept students from talking to their parents about debt: First, the more debt students had, the more reluctant they were to tell their parents about the debt. Second, the more tension they felt in trying to become independent from their parents, the less likely they were to have conversations about money. This tension was generally higher in coalition families.

In the survey, the researchers asked how many credit cards a student had. Students with one to three cards seemed wiser about how credit works than respondents who reported having four or more credit cards.

"It’s troubling to notice that the students who are getting more cards have less knowledge," said Allen.

The researchers are using this information to create an interactive CD-ROM for families. It will target parents and their teenage children. The CD-ROM will include instruction in the basic knowledge of finance, along with good communication skills. It will address how families can deal with money-related conflict and stress, how to listen and communicate in a constructive way, how to budget and how to save.

The CD-ROM will be targeted to families with children ages 14-17 because these children will soon be approached by credit cards as they graduate from high school. The CDs will be available through cooperative extension offices regionally and will be available nationally through the National Endowment for Financial Education’s High School Financial Education Program.

The survey portion of the research and the CD-ROM development was funded by a grant from the National Endowment for Financial Education (www.nefe.org), a non-profit foundation dedicated to helping all Americans acquire the information and gain the skills necessary to take control of their personal finances.