Amanda Froeber
Published: January 25, 2006
like you are listening.
College-age adults show more signs of money abuse than any other age group, according to survey data released by Myvesta.org, a nonprofit consumer education organization.
Sallie Mae, the top student loan company, says that the average undergraduate student has at least one credit card, and the average balance is more than $2,000.
PJC students are no strangers to credit cards either.
“I thought they were cool until I .couldn’t pay for it,” said Jessica Gizwick, a sophomore.
She uses her cards nearly every day, despite having about $3,000 in debt.
Tony Jamison, a freshman, finds that credit cards are “an easy way to get you into debt. Once you receive your first credit card its hard not to spend a lot and to resist impulse buys.”
He also is concerned about the high interest rate, and currently has “about $500” in debt.
Davin Garrison, a sophomore, likes having a credit card because “it makes life a little easier. I don’t always have to worry about having cash on me at all times.” He currently has no debt and intends to keep it that way.
What can you do to prevent bad credit? Well, a little precaution before a crisis occurs is preferable to a lot of fixing up afterward. Choose cards wisely. Before getting any credit card, read the fine print. Try to keep your balances low despite your credit limit, and always try to make more than the minimum payment.
Depending on the interest rate, you could actually get into a trap where the balance keeps growing higher despite making minimum monthly payments.
Store credit card rates are usually very high. Consider opting for a card from your bank or credit union.
But what if it’s too late? Bad credit can affect everything from loans to mortgages, insurance rates, utility deposits, employment, housing and more.
Bad credit can come from late payments, high balances, collection accounts, the length of time the account has been open, closing several accounts in a short period and multiple credit inquiries, according to Fair Isaac Corporation, the company that determines credit scores.
Start by cutting up all but one card reserved for emergencies. Pay down the balances starting with the highest interest rate.
Don’t immediately jump to debt consolidation. Think about it carefully because some people opt for a debt consolidation loan, only to quickly double their debt by using the cards they were paying off.
Be careful, and if you need help, check with the Better Business Bureau for a legitimate Credit/Debt Counseling agency.