4
NEWS
THE UNIVERSITY DAIRY KANSAN
WEDNESDAY, JULY 1, 2009
CREDIT (CONTINUED FROM 3)
BE DEBT SAVVY WITH CREDIT CARDS: SALLIE MAE'S 10 TIPS FOR COLLEGE STUDENTS
1. Build your plan to pay for college.
2. Limit yourself to one low interest rate (APR) card.
3. Charge only what you can afford to pay in full each month.
4. Don't accept increases in your credit limit.
5. Keep your card in a safe place where it's not easy to use for impulse purchases.
6. Pay the highest interest rate card first.
7. Pay your bill before it's due.
8. Keep copies of sales slips and compare them to charges on your bill.
9. Remember that a credit card is a convenience — not a source of spending money.
10. Follow the 1-2-3 approach to paying for college.
Courtesy of Sallie Mae
three credit cards.
"I don't like using my card," Buckland said. "My first two credit cards, I just have a balance on them, I don't use them anymore. I just pay off the balances."
SPENDING HABITS
Danya Goodman, Bedford, Mass., graduate student, has two credit cards: One card gives her 1 percent cash back on purchases and 3 percent cash back on gas, and the other card is used as an emergency in case something happens to the main one.
Goodman said that she used her credit card almost all the time when purchasing items because she gets money back, but that she only used it if she knew she had enough money.
Shortly after receiving her undergraduate degree, Goodman's car needed repair, but she could not afford to immediately pay it off. She applied for a credit card that had a 0 percent interest rate and used it to pay for the repairs, paying the balance off over the next two months.
"You can take advantage of the credit cards if you understand how they work." Goodman said.
The study conducted by Sallie Mae found that 60 percent of undergraduates had been surprised at how high their credit card balance had reached, and 40 percent said they had charged items knowing they did not have the money to pay the bill. The study also found that only 17 percent of undergraduates said they regularly paid off all cards each month.
Paige Hendrick, Leawood senior, said she would go out to dinner with her friends and instead of splitting the bill, she would put the entire bill on her card and have her friends pay her in cash. Then she would go out to bars and spend the cash instead of using the credit card, which her parents would see online.
"I would never give my parents the cash. My parents just finally were fed up and said, 'We're not doing it anymore' and they cut it completely up,' Hendrick said.
Hendrick said that the $1,000 credit card she had was maxed out and that she wanted another one for
emergencies, but did not trust her self not to abuse it.
Hendrick's past experience with credit cards gave her an opportunity to offer advice and to warn students who were still accumulating debt.
"Iimmediately stop using your credit card until you can pay them off," Hendrick said. "Pay as much as you can and try to get that debt off as quickly as possible."
PAYMENT HABITS
Cook said she could help University students cancel their cards or set up a payment plan at Commerce Bank if they were unable to make payments on time.
"A lot of kids want to hide from the problem, and that's not what you should do." Cook said. "You're in college now. You need to confront the problem, get it taken care of and resolve it."
William Lewis, professor of personal finance, said credit card companies could be forgiving when it came to late fees and annual percentage rates.
"If you've been a customer of a credit card company and you don't overdraw and you usually pay on time, they'll waive those things periodically," Lewis said. "I think people ought to call or to ask — 'Hey listen times are tight, things are going down. I'd like to get this APR lowered.'"
Goodman said she paid off all of her credit card debt each month and felt "lucky" to have always had a job that allowed her to pay for things and parents who had helped her out when she could not afford something.
Bowman said some students did not realize that whatever balance remained at the end of the month would be added to the principal and charged interest every month until it was paid off. He said he paid the minimum because it was all he could afford.
Bowman had one suggestion for students who have massive credit card debt: "Don't buy shit you don't need."
— Edited by Kristen Liszewski