Welcome to College! and to financial hardship. So, I am into my first week of school for the Fall 2009 season and was walking out of the campus bookstore to see all the vendors with their free goodie bags getting ready to lure me in. Don’t get me wrong, there are lots of great things vendors give away and all you have to do is fill out an application to get them. Harmless right?
I can remember myself in this same situation years ago while I was attending another school and it’s one that I will never forget. Just out of my parents house, with a small amount of cash in my bank account + vendors with credit card offers = tempting. Let’s just say before I signed on the bottom line it might have been good to read the small print, you know the kind that you need a magnifying glass for.
It’s sad to say, but credit card rates were a little better a few years back because of the economy. Now credit cards can come with some whopping interest rates, starting off. Let’s say for example you decide to sign up for one of these cards, a few textbooks later and some food here and there, leaves you with charges around $1,000. You didn’t check that fine print when signing up and have decided to make the minimum payment. Let’s see, with an 18 percent interest rate this would take you more than 7 1/2 years to pay off and would cost you an extra $516 in interest alone. You might be wondering about the “supposed” zero percent interest rate. Many credit card companies offer these introductory rates to make you think you’re getting some free money, but in most cases say goodbye to that in 6 months or less. If for some reason you miss one due date or go over the limit this will leave you in a whole other mess of hurt.
There are plenty of consequences to getting yourself in this mess at an early age and although you may think you understand the fine print, there is a lot of other information to consider before signing on the dotted line. You need to think about what poor credit decisions can lead to as not only can you ruin your credit, but it can also affect your career. You might be surprised to know that many employers use credit information to determine whether they can hire a prospective employee. This allows for employers to determine responsibility and what kind of financial risk you might impose for them if hired. If they see you are having trouble managing your personal finances, they may not trust you in making responsible decisions for their company if employed.
Just remember that good credit decisions now can help to make your college experience a great one. Try to plan ahead for any extra expenses you might incur by working a part-time job during the summer or Christmas break. If you have never balanced your budget, seek help from a family member of friend to get you on the right track. Knowing how much “extra” money will help you determine whether you can afford to blow money on new clothes, movies and other misc stuff.
Good financial decisions now – both bad and good – can stay with you for many years to come so make smart decisions concerning credit cards during college and this will help pave a road for your financial freedom…
About Michael Campbell
