Students’ choices determine credit future

One month before an individual’s 18th birthday, credit card companies start sending letters claiming that he is pre-approved for a Platinum Card with an extravagant $5,000 credit limit.

Many may view having a credit card as one of the responsibilities of becoming an adult, while others will automatically rule it out, opting not to open the mail.

According to the Nellie Mae Credit Card Study, 83 percent of undergraduate students have at least one credit card and 21 percent of undergraduates with credit cards carry high-level balances between $3,000 and $7,000.

While some have credit cards in their own names, other students receive credit cards from home for emergencies.

“My parents gave me their credit card when I was leaving for college,” said Jasmine Sterling, 21, a junior business administration student from Birmingham, Ala.

“I have to admit, there were a few purchases that I had to explain to my parents when they got the bill,” Sterling said.

For college students, the lack of financial education is a reason some find themselves in financial troubles.

Some students with credit admitted they did not think about having to pay for purchases later when high interest rates forced them to pay twice the original amount.

“You don’t think about paying it off a month from now,” said Florence Jean-Baptist, a 19-year-old junior education student

“All you think about is the moment and charging whatever it is that you want,” said the Miami native.

Jean-Baptist said she wished someone had told her the do’s and don’ts of credit cards.

The Education Resources Institute said most students use credit cards responsibly to build credit.

But according to Mary Smith, a community banking officer at Capital City Bank, one major credit card is enough.

“Too many credit cards are bad for your credit rating,” Smith said.

She said a better way to build credit is to put money in a savings account and then borrow it from the bank.

Smith said it’s beneficial because students can save money while establishing credit.

However, there are solutions for students faced with debt.

“If you are in debt and have charged your credit card to its maximum limit, don’t stop paying just because you can’t afford it,” said Trisha Landerville, a financial service representative for Sun Trust Bank.

Landerville said students should pay as much as possible each month and, if necessary, contact a debt consolidation company to pay off debt at a lower interest rate.

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