Viewpoint by Marley Malenfant/se news editor
Credit cards are an unnecessary evil targeted to young adults every year. Many students get plenty of credit card offers at 18 but don’t have the financial responsibility, usually resulting in early debt.
Students may have trouble paying for their school or want material items they cannot afford, so they use the card. But most people at that age really haven’t learned how to budget their money. Late payments add up, and after that, they may be in debt.
A new law takes effect in February preventing banks from issuing credit cards to people under the age of 21 unless they have a co-signer or can prove they can pay bills on their own.
This law is an excellent way for young people to establish themselves with other means of money and not make the mistakes many Americans have made.
College grads of 2008 had an average of $4,138 in credit-card debt, and one in five seniors carried more than $7,000 in debt. Freshmen owed an average amount of $1,533, according to Sallie Mae.
Many students may not have developed any credit for themselves, but a credit card is not the best method.
Go to a bank and open a checking or savings account, maybe create a joint account with a parent. If money ever gets tight, Mom and Pop can always come through.
Having automatic payments taken out of your checking account is another way for students to build credit. Credit bureaus will have records of what bills are paid, and it’s really important that bills get paid on time. It’s also important to have a good employment history. Holding down a job and not having huge gaps of unemployment looks better to creditors. Getting a credit card or a loan will be harder with a bad employment history.
Some students may believe they’re entitled to a credit card, use it too much and get into trouble. Once the new credit law takes place next year, students can learn to become more frugal when spending money.
