Credit Trap: What They Dont Tell You About Credit Cards In College
In industrialized nations, going into debt starts early. It's easy for an eighteen-year-old to get credit cards and fall into debt, especially if they're headed for college.
I remember my first year in college as a 17 year old. Credit card offers were plastered all over the university campus. I don't know what saved me from falling into the credit trap when I was in college but many of my friends were not so lucky.
Many of them started out by using credit cards for textbooks, then stereo equipment and clothes. Then the next thing they knew, they were drowning in credit card debt.
No one told them what they were getting themselves into. Often, credit cards that are geared toward college students come with very high interest rates. Credit card companies say that this is due to the fact that students often have limited credit histories and that they have a higher default rate than other groups.
However, what credit card companies don't tell you is that young lives are being ruined by credit card debt due to dropping out of college, bankruptcy, job rejections (due to poor credit histories), loan denials, inability to rent apartments, professional school rejection, and even suicide.
A leading expert on the credit card industry reports about a number of these incidences including the suicide of some college students due to credit card debt in his book: Credit Card Nation. I think there should be a law against openly marketing credit cards to young college students. However, the situation is quite different; credit card companies are often given free reign in college and university campuses to market their wares to unsuspecting college students.
And what about those ubiquitous student loans that are often pushed at college students?
Financial Aid officers make it far too easy for students to sign on the dotted line.
"It's a low interest loan", they say. "You don't have to pay it off until you graduate", they say.
But what they fail to tell you is that student loans and credit card debt can put you in chains for years for which you cannot afford to make one financial mistake or you and your family could be put out on the street.
Furthermore, none of us know what is promised for tomorrow. We don't know if we will be healthy or sick; nor if we will get that well-paying job after graduation from college.
Speaking of getting a well-paying job after graduation, another thing they don't tell you in college is that it may be a good idea to check your credit report BEFORE you go out on your first job interview.
What does a person's credit report have to do with getting a job you may ask?
Well, a new trend in hiring these days is that many employers are checking potential employees' credit histories first before they consent to hiring you (great, isn't it?).
So, just what are they looking for when they look into your credit report? Well, my guess is that they probably will be looking at how much debt you owe and your payment history.
If what they read from your credit report indicates that you are a credit liability, then chances are you may not get that job you wanted.
These are just a few of the many truths that they don't tell college student about credit card debt before they sign on the dotted line.
A prepaid debit card is a MUCH better alternative to a credit card for a college student because a prepaid debit card actually helps you to stay out of debt as the money you spend is your own. Not only that but they are also useful tools for teaching college students financial management skills.
And of course, nowadays, there are a variety of debit cards available including debit cards issued by the two major names: Visa and MasterCard.
So, if you are a parent of a college student, be sure to educate your child about the dangers of credit cards debt BEFORE he heads out for the college campus. And if you can, why not consider giving him a prepaid debit card to send him money while he is away at college?
For more information about Prepaid Debit Cards, check out THE definitive guide to prepaid debit cards of all kinds including: prepaid mastercards, payroll debit cards, debit gift cards, virtual credit cards, offshore, US and international debit cards, at: http://www.debit-card-guide.com.
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