Perils of Credit Cards for College Students
For those college students who will apply for a credit card sometime soon, this one’s for you.
College is one of the best times of your life. It is the first time when you start to feel freedom. You are on your way to becoming the adult individual you are destined to be. You have probably seen a stand in campus grounds offering you a free credit card especially during graduation day. The temptation can be very great. Imagine having your own credit card. The power of plastic has done in so many students this way. What they fail to realize is that there are many problems to having a credit card. This is why President Barack Obama is lobbying against the issuing of credit cards for anyone under twenty one years old.
The credit card reform bill from the senate is expected to be passed in just a few days (from the time this post is being written). It got massive support from both parties because the wave of public opinion (it is more of a tidal wave really) is against the credit card industry. The creditors are being villainized for its shady practices of hiding fees and loopholes within fine print and highly technical jargon.
The problems for college students who want to apply for a credit card is that they are particularly vulnerable to these tactics. First of all, they are still relatively young and vulnerable to sales pitch. Secondly, they are not yet aware of all the legal terms. A lot of young people are of course impulsive and would quickly sign up for a credit card without knowing what they are really getting into.
The most common trap is the low interest rates that the company offers. What a lot of people are oblivious to is that these interest rates can change. Of course they will say that the interest rates of their card is as low as 1 to 0 percent annually. But they do not specify it is just a variable interest rate meaning it can change after the first annum.
Another problem college students’ face when getting a credit card is their ignorance of the concept of credit history. The fact is that college is usually when one’s credit history takes off. If a student does not take heed and handles his credit card unwisely, he or she will start his credit report badly. Credit history is important, if you have a bad one, this will impede you from buying your home, your car, and getting other credit card accounts. It will also keep you from getting good interest rates in your mortgages.
Remember this next time you plan to apply for a credit card. Soon the credit card bill will be passed and it will rule that you must show proof of your ability to pay or that a parent will at least pay it for you.
