Good credit management can avert financial debt

Having good credit is essential to a good financial future. However, many people, especially college students, end up in debt as a result of poor credit management. There are steps college students can take to avoid credit pitfalls and ensure a smooth credit future.

Credit card companies consider college students a target group. “Often times, lenders create products that can meet the needs of their younger customers,” said Tracey Mills, senior manager of public relations for the American Bankers Association.

“Students should remember that when they get a card, they are entering into the credit system. They are entering into a whole new experience,” said Laura Fisher, spokeswoman for the American Bankers Association Educational Foundation.

“I got my credit card through my bank and it has a lot of securities that other credit cards don’t have,” said Justin Clarke, 19, a sophomore healthcare management student from St. Petersburg.

Students should also realize the importance of credit scores. Kenneth Marshall, a client services supervisor for Credit Solutions, a debt settlement company based in Dallas, said credit scores determine credit card interest rates.

“A good credit score is between 680 and above,” he said. Students can check their credit score by contacting credit bureaus like Equifax, Experian and Trans Union.

College students can avoid credit debt by using credit wisely. “The only things you should charge are things you need, not things you want,” said a Member Services analyst.In addition, students should limit the amount of credit cards they have.

“I had a credit card and I finished paying it off. I used it to establish a good credit rating,” said Frederic Douglas, a FAMU math professor. “I’m getting ready to purchase a house and I have a newborn on the way. So I’ll probably be getting another one soon. Probably an American Express or Discovery because I like some of the rates they’re offering.”

Students can also help maintain good credit by paying more than just the minimum. “Paying the minimum can lead to complacency. You can be content now with paying the minimum, but 10-15 years from now you’re going to be looking at that same debt,” Marshall said.

Students who are unable to pay their credit card bill on time should take immediate action before their account becomes delinquent.

“If someone is having financial problems, the first thing they should do is contact their creditor. The last thing creditors want is to lose the principle and you as their customer,” Fisher said.In an effort to avoid debt, some students avoid credit cards altogether.

“I don’t have any credit cards. I don’t want to mess up my credit,” said Cynna Kelley, 18, a freshman political science student from Tampa. “You have to stop using your card. You can’t ever settle your debt if you’re continuously charging it up.”

Marshall encouraged anyone in serious debt to enroll in a debt management program.

“Our program is usually 36 months. We set it up and help you with monthly budgets to assess your bills.”

He attributes the large credit debt among college students to a lack of formal teaching in early years.

“I believe that we don’t teach enough about finance in school districts,” he said. “It should start in the second grade before students go through the teen pre-adult stage.”

Many people feel FAMU is not doing its part to teach students the do’s and don’ts of credit cards.

“FAMU as an institution doesn’t educate students on financial responsibilities. It’s something I truthfully don’t know why they haven’t done anything,” Douglas said.