How to use your credit cards wisely

By Jennifer Baeskens |Staff Writer|

Credit cards can drag you down a rat hole of serious debt and leave you marked for life.

Students Patrice Thompson and Chris Burns both use their credit cards frequently.

“I understand that I need to be a responsible user and I understand the consequences and how it can affect my future if I am not responsible,” said Thompson.

Credit card companies flock to campuses during the beginning of the school year trying to get students to sign up for new credit cards.

These companies don’t let students know what is in the fine print and most don’t understand what a risk these cards can be.

According to Lisa Gomez, Vice President of People’s Bank Southern California Mortgage Division, “Giving credit cards to young students gives them the ability to harm themselves and their future.”

“Many young people don’t read the fine print and thus they are harming their futures,” continued Gomez.

Late payments, cash advances and using your card to buy everyday items are all ways in which these cards can be harmful.

Late payments and interest only payments not only create bad habits, but they also lead to debt.

According to statisticbrain.com, the average undergraduate has $3,173 in credit card debt, not including student loans.

Credit scores are also lowered with each payment that is late and each cash advance transaction.

Once a person falls behind in their payments, recovery of your credit score becomes very unlikely.

Default rates, which are the highest interest rate a company can charge you, are also increased for each payment that is not paid.

Monthly payments go up until the balance is lowered or paid off.

Credit cards seem scary but they can do a lot of good and have many positive attributes to students.

Credit card companies give their customers the protection they need against fraudulent activities, many times without question.

This service provided by the companies is a great service of protection against credit card fraud both on a personal level and a mass level, such as the recent Target controversies.

Burns told a story of how his credit card was charged fraudulently.

Burns was able to contact his bank, have the charge voided and have his money reimbursed. Burns’ bank then sent him a new card to prevent more fraudulent charges.

Credit card companies not only protect their customers, but the credit card itself will be able to help purchasing a home when the time comes.

Credit cards offer one of the three forms of credit needed when getting a conventional loan.

A home might seem like a long way off but it is important to remember that keeping a low balance or no balance at all will help with the loan.

Cards can be a life saver when we are in a situation where we need to make an important purchase like textbooks.

We have all been in that situation where we have needed to purchase a book and are in between paychecks. These cards can be a great tool when life gives you lemons.

Credit cards can be good and bad. They can be scary if misused but they can also be very helpful and a great tool if they are used with responsibility and understanding of the terms.