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news
Students
often forget credit card debt
By Michelle Siazon
On-line Forty-Niner
Master Card, Visa,
American Express, Discover, Victoria's Secret, Nordstom...the
choices are endless. The debt, however, is also endless.
Four out of five college students have at least one credit
card. Forty-eight percent have paid a late fee for a missed
payment, according to a survey by the California Public Interest
Research Group.
For some it is an answer to all financial problems, but for
most college students and first time credit users, it is the
root of financial problems.
"Most college students that get into trouble with credit
view credit cards as a source of income," said Consumer
Credit Counseling Service of Los Angeles' director of marketing,
Jennifer Root. "They actually do not have the money to
cover the cost of the books, supplies or entertainment, then
they do not pay off the balance at the end of each month and
it grows and grows."
For undergraduate students, 78 percent of which have credit
cards, the average credit card debt is $2,748. Thirteen percent
have credit card debt between $3,000 to $7,000 and 9 percent
have debt greater than $7,000, according to the 2000 summary
statistics of student loan agency Nellie Mae.
Root shared some simple steps to build credit without falling
into a deep well of credit debt:
• Open
a checking or savings account to help prove financial responsibility.
It's a convenient, safe way to pay bills and a checking
account establishes your credibility with potential landlords.
• Get
a secured credit card.
A secured credit card is a bank credit card backed by money
that is kept in a bank account. Do not use a bank that charges
an application fee for secured cards. Use the secured card
for purchases and pay the bills on time.
• Ask
a friend or relative with good credit to co-sign your credit
application.
A co-signer promises to pay and puts his or her own
good credit on the line. After using the credit account responsibly
for one year, an individual account will be easier to attain.
Although, most college students will not have a problem accessing
credit because creditors are anxious to get new customers.
• Beware of cards that offer a low, introductory "teaser"
rate that jumps up to an above-average interest rates in three
to six months if one payment is made late.
It's safer to just choose a card with a fair "fixed"
rate and stick with it.
The Cal State Long Beach campus is visited by approximately
two or three credit card companies per year that have tables
outside of the University Bookstore almost every other week,
depending on space available, according to general manager
and CEO of Forty Niner Shops Inc. Roman Gulon.
"Credit card companies aren't allowed to market to students
just anywhere on campus," said Associated Students Inc.
Vice President Danny Vivian. "Legislation passed by the
California State Students Association forced them to set up
tables or booths and any person on campus handing out flyers
or information needs clearance by the university."
Acting upon the resolution made two years ago by the California
State Students Association, A.S.I. is planning to hold financial
workshops for anyone interested in debt management counseling.
A.S.I. is currently working with local banks and trying to
get representatives from Farmers and Merchants Bank to help
design the financial workshops, according to A.S.I. President
Wayne Stickney-Smith.
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Cara
Garcia/On-line Forty-Niner
Something Missing? Of, course! Notice the lack
of credit card vendors violating your walk to class and your
debt problems in front of the Bookstore.
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