Credit Cards: Are they worth the risk?

By Eugene A. Iancovelli
September 20, 2001

by Eugene A. Iacovelli

staff writer

It’s time to get back into the swing of things. That of course means return to buying textbooks, supplies for your dorm room, and the many other essentials. Moving onto campus can be pretty expensive. For those who do not have cash up front, there is the option of using a credit card. But how well do credit cards and college students go together? It’s almost certain that before most students are even settled into their dorms, they will be enticed by credit card companies. Some credit card companies use teaser rates to lure in customers. These are low interest rates that will go up dramatically within six months. The important thing to remember is, know your rates.

Once obtaining a credit card, a student is well under way to establishing a credit history. But it is important for students to know ahead of time the long-term effects of a high credit balance. Having a credit history is important when wanting to purchase a car or house. Without a credit history, it can be nearly impossible to get a loan.

Over charging credit cards can lead to a high balance, if not paid on time. If left unpaid, or paid late, the debt can be enormous. Accumulating a hefty balance can be quite costly. It can take up to 12 years and $1,115 in interest to pay off a $1,000 bill on a card with an 18 percent annual rate. One way to begin establishing a good credit history credit is by applying for a debit card. This will allow a card-holder to charge items, but the money is taken directly from their savings account. This allows for a student to begin their credit history without spending more than they already have in their savings account.

Freshman Karri Houser just began using her debit card. “It comes in handy for buying books, groceries, and other items that may be needed,” said Houser, “but it is also a little too easy.”

Owning a credit card may make buying a little too easy for some, but it’s the responsibility that needs to be established, as well as a credit history. Another option is to consider voluntary limits. Putting a voluntary limit of less than the card company will allow leaves out all those thousands of credit dollars waiting to tempt you. Just because you are able to borrow thousands of dollars doesn’t mean that you should. Students just beginning to use their card should know what they’re getting into before making any commitments. Freshman James Romano thinks that it’s best to buy it with cash and rely on his savings account.

Some students may choose to wait until they are a few years into college before trying to apply for a credit card. The fear of being left with a large balance while still in school has some students willing to wait.

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Eugene A. Iancovelli

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