2008 Woodie Awards
The Wonderful World of Credit
Brent's response to the emergence of credit card booths.
Brent Feltenberger
Posted in: News on 4/15/08 at 2:17 PM PST
Every semester at Harbor College, we see all these glamorous credit card booths. Inside these booths are representatives from major credit card companies that try to hook Seahawks into inquiring for a credit card. They do so buy offering free gifts such as t-shirts and even pizza.
Being a starving college student, it is hard to resist the temptation of a credit card or these free gifts. These days, it is almost impossible to make a major purchase without the plastic. But while establishing credit is a good thing, some outcomes are not. According to Bankrate.com, 7 out of 10 college students have 1 or more credit cards. Moreover 60% of these card holders owe at least $1,500 to the creditor.
Part of the problem with these cards many feel as if it is free money. This of course, is not true. This borrowed money must be paid back along with interest. Interest for new card holders is always going to be high, normally 20%. This can be overwhelming. Timothy Ream can agree. As a freshman to Harbor College, Ream used his credit card less than sparingly. "It felt good knowing I could go into a store and get what I need without any cash. When I saw my first bill along with the interest I was less than amused".
Many students pay only the minimum payment. This technique is an option but not a good one. While the law states that the creditor must provide some of the principal into the minimum payment, most of it is interest. Credit card holders such as Futha Al-abdulrazzq knows this law very well. "The credit card companies make a lot of money off me. I buy a math book at the student store for $80 with my Visa and get my statement at the end of the month to pay at least $15. I try to pay more than the minimum but things get tight."
While these credit cards do have strings attached, the sad fact is, as stated before,you need the cards in order to buy or even rent certain things such as a home or car. If at least the minimum has been paid in a timely fashion it will help you when a landlord checks your credit rating. According to CNN Finance's suggestions, the best thing to do is to read the fine print before signing the contract. Also, include paying at least the minimum payment and using the plastic in moderation. Limiting yourself to one or two cards is also helpful as well.
The website Collegeboard.com says as long as there are college students, there will continue to be credit card booths. So, one must establish credit but be smart about using it.
Being a starving college student, it is hard to resist the temptation of a credit card or these free gifts. These days, it is almost impossible to make a major purchase without the plastic. But while establishing credit is a good thing, some outcomes are not. According to Bankrate.com, 7 out of 10 college students have 1 or more credit cards. Moreover 60% of these card holders owe at least $1,500 to the creditor.
Part of the problem with these cards many feel as if it is free money. This of course, is not true. This borrowed money must be paid back along with interest. Interest for new card holders is always going to be high, normally 20%. This can be overwhelming. Timothy Ream can agree. As a freshman to Harbor College, Ream used his credit card less than sparingly. "It felt good knowing I could go into a store and get what I need without any cash. When I saw my first bill along with the interest I was less than amused".
Many students pay only the minimum payment. This technique is an option but not a good one. While the law states that the creditor must provide some of the principal into the minimum payment, most of it is interest. Credit card holders such as Futha Al-abdulrazzq knows this law very well. "The credit card companies make a lot of money off me. I buy a math book at the student store for $80 with my Visa and get my statement at the end of the month to pay at least $15. I try to pay more than the minimum but things get tight."
While these credit cards do have strings attached, the sad fact is, as stated before,you need the cards in order to buy or even rent certain things such as a home or car. If at least the minimum has been paid in a timely fashion it will help you when a landlord checks your credit rating. According to CNN Finance's suggestions, the best thing to do is to read the fine print before signing the contract. Also, include paying at least the minimum payment and using the plastic in moderation. Limiting yourself to one or two cards is also helpful as well.
The website Collegeboard.com says as long as there are college students, there will continue to be credit card booths. So, one must establish credit but be smart about using it.
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