News - Low Rate Credit Card
Experts Warn Against Accruing Poor Credit
Tue, Sep 23, 2008
Students should learn as much as possible about credit cards in order to avoid credit problems that can adversely affect their future, the American Financial Services Association Educational Foundation advised in an August press release.
Zions Bank Operations Manager David Duncan said SUU students should get a credit card because they can't purchase a car or a home until they have built some credit, but he cautioned them to use the credit card wisely.
According to the AFSAEF press release, a "common mistake is for students to make impulsive decisions about credit cards," AFSAEF President and CEO Susan Irvine said. "They sign up for them based upon the giveaways, without considering the responsibility that comes with using a card."
Wells Fargo Personal Banker Randy Bennett said the bank often encounters students with credit trouble caused by mismanagement of credit cards.
Most times, students mismanage credit cards from stores like Maurices or Home Depot because they don't take them as serious as bank-issued cards, he said.
Mismanagement of credit cards puts bad marks on a person's credit score and it can take two to five years to clear up, said Melody Johnson, assistant manager of bank card department at State Bank of Southern Utah.
Earning bad credit as a student makes future banking harder, Bennett said.
"As a bank, we have to take everything into consideration, especially past credit history," he said.
Also, students with bad credit will not qualify for Financial Aid, said Mary Jane Higley, Financial Aid Office manager.
After students have accumulated bad credit, they have a few options available to them.
"The first thing students should do is stop accruing bad credit and get their credit under control," Duncan said. "They should make payments and practice good credit."
Another option is to get a Secured Card, Bennett said.
"You still build credit, just at less risk," he said.
Source : http://media.www.suujournal.com/
