8/8/2019 Students should beware of credit card debt

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Students should beware of credit card debtBy Christopher Tray'EDITOR

Free T-shirts, mugs, and seatcushions aside, it is rather easyto- see that more and morecollege students are beginningto accumulate credit card debt.As reported in a 1998 printingrrl' the Carrrpu.s Mottitor. il waslirund that full-time studentscontrol in excess of $19 billiontlrllars in annual spending.According to the UnitedStrrtt's Sludr'rrt Association(t lSSn ) arrcl its nresidentKenrlnr Iirx-l)lvis. studentssltottltl ttlwltys gcl p'i.1in lirlrrral iorr liorrr tlrc crcdit carclcompuny hclirrc cvcr srgrring u1rtbr the card.

"StLttlcrtts slrorrlrl, Iirst oll.ttutke u budge t ol lrow rrrrre lrthey want to spend and liowthey plan to pay back the debt,"Fox-Davis said. "Finding outabout the annual fee, the annualpercentage rate, as well as theaccruemenl of debt are justsome of the issues that thestudent should think aboutbefore signing up for any card."The Student Monitor alsoreported that nearly 60 percentof college students pay theirrnonthly credit card in full. Ofthe other 40 percent, 8l percentof tlrese students pay more thantlrc nrirrirrrunr anrounl due .

l)cspitc thcsc srlrr.rcwlrirtprornising statistics, tlrc srtrallf'ew who do not manaue their

ttetltl w't'll ollt'tr rrrrrr llrirrls lor'lltc orrt's llrul. in lue l. tk'"A large nurrrber ()l' studctrtsat universities use their creditcard in responsible ways," Fox-Davis said. "For those thatdon't, we advocate that theyshould use their credit cards foreducational means such aspaying for tuition, housing,and/or things like books. Thosewho use credit cards forextraneous things such asclothes, furniture, and otherexpensive home appliances arethe ones that seenl ttl gctthenrselves into tlre rlost debt."Currently, Fox I)avis'(|r'gilnlzatron ls partnenn{ t-lp

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wtsE ADvtcE - colese students "r" "oi/i3"Jil-ii"tH;ommon sense when applying for credit cards. credit carddebt can be a big problem for students who use credit cardsto purchase big-ticket luxury items such as furniture,appliances and clothes.

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8/8/2019 Students should beware of credit card debt

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Cfedat Cafds ' r continuedfrompage lwith MasterCard in order tospread the word of collegiateconsumer debt."So far, we have a list of 50target campuses set up all overthe counhy to warn studentsabout the perils of credit carddebt," Fox-Davis said. "Inaddition to that. we have sentout boxes upon boxes of our'Are You Credit Wise'pamphlets that help to explainhow students can better managetheir credit line."Fox-Davis has alsodistributed a power-point

presentation to studentgovernmen ts lgrgs_s,!he, cgun tr1

in the hopes that they'll holdseminars to show students howto better manage their credit."It's a shame, because oftentimes, students are unfairlitaken advantage of," Fox-Davissaid, "and really, that is one areathat we want to cut down onwith the credit card companies.When MasterCard told us theywere also getting an educationalprogram off the ground, wethought it would be a great ideato partner up with them."As far as students go, the ideaof MasterCard getting involved

has been well received. Fox-Davis said. 'The only negative

feedback we have had to endurein recent months has stemmedfrom consumer groups fromWashington D.C," she said.Colin Crowley, a financialadvisor at GromcoIncorporated, feels that manystudents get themselves intotrouble simply by taking on acredit line that isjust too high."Personally, I wouldrecommend that freshmen startwith one low credit line ($500-$1000)," Crowley said. "Justbecause students mav beaccepted for five or more creditcards.does not mean that theyshould apply for five cards."

Another vital concern is thatmany students do not exercisethe correct option of keeping upon their payments."Students need to beorganized so they can pay theirbills on time," Crowley said."Late payments can show up onyour credit repo$ for up toseven years and with that, canaffect your credit limit after yougraduate."Although many creditcompanies tend to lurestudents by offeringintroductory annual percentagerates, Crowley further relatedthat these "special-offer" credit

cards typically top out at around15 percent A.P.R."After a student .builds up afavorable credit history,graduates, and findsemploynent," Crowley said, ..itis at that time that they wilt bein h position to take advantageof low rate card otfers."When asked about the USSAand MasterCard partnership,even Crowley elicited concern."Whether or not MasterCardand the federal government canactually present students withhelpful information that thevwill actually pay attention to,well, that is another question."

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