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Credit Trap: What They Dont Tell You About Credit Cards In
College
In industrialized nations, going into debt starts early. It's
easy for an eighteen-year-old to get credit cards and fall into
debt, especially if they're headed for college.
I remember my first year in college as a 17 year old. Credit
card offers were plastered all over the university campus. I
don't know what saved me from falling into the credit trap when I
was in college but many of my friends were not so lucky.
Many of them started out by using credit cards for textbooks,
then stereo equipment and clothes. Then the next thing they knew,
they were drowning in credit card debt.
No one told them what they were getting themselves into.
Often, credit cards that are geared toward college students come
with very high interest rates. Credit card companies say that
this is due to the fact that students often have limited credit
histories and that they have a higher default rate than other
groups.
However, what credit card companies don't tell you is that
young lives are being ruined by credit card debt due to dropping
out of college, bankruptcy, job rejections (due to poor credit
histories), loan denials, inability to rent apartments,
professional school rejection, and even suicide.
A leading expert on the credit card industry reports about a
number of these incidences including the suicide of some college
students due to credit card debt in his book: Credit Card Nation.
I think there should be a law against openly marketing credit
cards to young college students. However, the situation is quite
different; credit card companies are often given free reign in
college and university campuses to market their wares to
unsuspecting college students.
And what about those ubiquitous student loans that are often
pushed at college students?
Financial Aid officers make it far too easy for students to
sign on the dotted line.
"It's a low interest loan", they say. "You don't have to pay
it off until you graduate", they say.
But what they fail to tell you is that student loans and
credit card debt can put you in chains for years for which you
cannot afford to make one financial mistake or you and your
family could be put out on the street.
Furthermore, none of us know what is promised for tomorrow. We
don't know if we will be healthy or sick; nor if we will get that
well-paying job after graduation from college.
Speaking of getting a well-paying job after graduation,
another thing they don't tell you in college is that it may be a
good idea to check your credit report BEFORE you go out on your
first job interview.
What does a person's credit report have to do with getting a
job you may ask?
Well, a new trend in hiring these days is that many employers
are checking potential employees' credit histories first before
they consent to hiring you (great, isn't it?).
So, just what are they looking for when they look into your
credit report? Well, my guess is that they probably will be
looking at how much debt you owe and your payment history.
If what they read from your credit report indicates that you
are a credit liability, then chances are you may not get that job
you wanted.
These are just a few of the many truths that they don't tell
college student about credit card debt before they sign on the
dotted line.
A prepaid debit card is a MUCH better alternative to a credit
card for a college student because a prepaid debit card actually
helps you to stay out of debt as the money you spend is your own.
Not only that but they are also useful tools for teaching college
students financial management skills.
And of course, nowadays, there are a variety of debit cards
available including debit cards issued by the two major names:
Visa and MasterCard.
So, if you are a parent of a college student, be sure to
educate your child about the dangers of credit cards debt BEFORE
he heads out for the college campus. And if you can, why not
consider giving him a prepaid debit card to send him money while
he is away at college?
For more information about Prepaid Debit Cards, check out THE
definitive guide to prepaid debit cards of all kinds including:
prepaid mastercards, payroll debit cards, debit gift cards,
virtual credit cards, offshore, US and international debit cards,
at: http://www.debit-card-guide.com.
Permission to reprint with full attribution which must include
this permission text.
MORE RESOURCES:
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