Dear Students: Are You Ready To Graduate With Some Huge Credit Card Debts?
George Boelcke CCP
September 04, 2007
Ah the first week of September and college and university students are back at it this week.
If you’re a freshman, I know your parents are concerned that you’re going to do more partying than studying – that’s something they’ve told you over and over. But there’s something they’re even more scared about, but probably didn’t harp on.
It’s likely that you’re going to graduate with an average student debt of more than $20,000. But on top of that, you’ll likely have some big credit card debt.
You see, this week you’ll going to get bombarded with credit card offers. You’re finally free and independent, and no parent is gonna be looking over your shoulder and questioning your decisions. So is it flattering that credit card companies now really really wants you badly… or is it a recipe for future financial hell after graduation?
You decide. But this week, well, really all year long, you’re going to get a chance at a free T-shirt or coffee mug if you just “sign here.” There’s even a bank that has the catch line: You don’t need a job, you don’t need any income – being a student is your job!
If you’re not convinced yet that helping you go broke is big business, remember that some card issuers have signed excusive contracts for over $100 million just to get in your face. It’s hugely profitable for them, because you’re likely only going to be able to afford minimum payments. Great for them – huge financial trap for you!
If you can’t learn to say no – at least take a walk to your own bank and get a low rate card and make sure it doesn’t come with a Universal Default clause that can explode your rate to around 30%. And never ever forget to make minimum payments or your late fees will be more than an average text book as well as some hefty over-limit fees if you exceed your credit limit even by a penny!
And what’s going to get charged on that credit card? Pizza and beer. Of course you won’t take my word for it – so at least keep your statements somewhere so you can look back when you reach the point of serious stress and trouble because of your debts.
Oh, and take that first money you have this week and spend five bucks of it renting a DVD called Maxed Out. It’s about the inside workings of the credit card industry and has a big segment on a family who had two of their college kids commit suicide because of their credit card debt.
And a couple more things from a BMO survey of post secondary students:
77% have a credit card – but you know the other 23% do just fine with a debit card. In fact, they’re light years ahead of you, financially!
7 out of 10 students had no idea how long a credit rating stays on their file. You gotta know – it’s seven years plus. So what you do today has a huge impact!
Two-thirds of students didn’t know that their credit report affects future employment. Yes – when you graduate, employers look at your credit rating – probably more so than your diploma!
In the words of the Rod Stewart song: I wish that I knew what I know now – when I was younger. Well, this is your heads up – or in the words of the old Captain on Hill Street Blues: Be careful out there.
If you’re a freshman, I know your parents are concerned that you’re going to do more partying than studying – that’s something they’ve told you over and over. But there’s something they’re even more scared about, but probably didn’t harp on.
It’s likely that you’re going to graduate with an average student debt of more than $20,000. But on top of that, you’ll likely have some big credit card debt.
You see, this week you’ll going to get bombarded with credit card offers. You’re finally free and independent, and no parent is gonna be looking over your shoulder and questioning your decisions. So is it flattering that credit card companies now really really wants you badly… or is it a recipe for future financial hell after graduation?
You decide. But this week, well, really all year long, you’re going to get a chance at a free T-shirt or coffee mug if you just “sign here.” There’s even a bank that has the catch line: You don’t need a job, you don’t need any income – being a student is your job!
If you’re not convinced yet that helping you go broke is big business, remember that some card issuers have signed excusive contracts for over $100 million just to get in your face. It’s hugely profitable for them, because you’re likely only going to be able to afford minimum payments. Great for them – huge financial trap for you!
If you can’t learn to say no – at least take a walk to your own bank and get a low rate card and make sure it doesn’t come with a Universal Default clause that can explode your rate to around 30%. And never ever forget to make minimum payments or your late fees will be more than an average text book as well as some hefty over-limit fees if you exceed your credit limit even by a penny!
And what’s going to get charged on that credit card? Pizza and beer. Of course you won’t take my word for it – so at least keep your statements somewhere so you can look back when you reach the point of serious stress and trouble because of your debts.
Oh, and take that first money you have this week and spend five bucks of it renting a DVD called Maxed Out. It’s about the inside workings of the credit card industry and has a big segment on a family who had two of their college kids commit suicide because of their credit card debt.
And a couple more things from a BMO survey of post secondary students:
77% have a credit card – but you know the other 23% do just fine with a debit card. In fact, they’re light years ahead of you, financially!
7 out of 10 students had no idea how long a credit rating stays on their file. You gotta know – it’s seven years plus. So what you do today has a huge impact!
Two-thirds of students didn’t know that their credit report affects future employment. Yes – when you graduate, employers look at your credit rating – probably more so than your diploma!
In the words of the Rod Stewart song: I wish that I knew what I know now – when I was younger. Well, this is your heads up – or in the words of the old Captain on Hill Street Blues: Be careful out there.