After graduating high school most young adults will either choose to go to college, immediately start working, or decide to join the military. Credit card companies often see this as an opportunity to seek out to these people and offer them great deals on credit cards hoping that they will accept their offers. Before these people make the decision on whether or not they should get a credit card they must first know the disadvantages and advantages of having one. It is very important that they know both sides so they make the right choice.
One of the many disadvantages of having a credit card is that people may create debt when they are using their credit card to make automatic payments for their monthly bills. Most credit card holders have
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Making late payments ruins credit scores faster than anything. It takes years to build up a good credit score, while it only takes one late payment to make that card holder restart all of their hard work to build it back up. As said on myFICO this means that a recent late payment, could be more damaging to a person 's FICO score than a number of late payments that happened a long time ago. No matter how late a person may make their payments, their credit score will still drop. Depending on how late they paid, will depend on how much their score will drop. Written by the Equifax Experts they say in this case, the late payment can show up on their credit report and be factored into their credit score. Late payments will be listed on a card holder’s credit report depending on how late they are: 30 days late, 60 days late, 90 days late, 120 days late, 150 days late, or charged off. Depending on how good that person’s credit score is, then the drop may not affect them. For those people who don’t have the best scores, than those late payments will hurt them drastically.
Closing a card account may also cause credit scores to drop. The Experian Team says that closing an account causes the overall utilization rate to increase. As a result, the consumer’s credit scores may decrease. A utilization rate is also called the balance-to-limit ratio, and the lower the utilization rate is the better. Closing card accounts can affect a credit score just as much as getting into debt can. Jason Steele says closing a credit card account and incurring more debt have the same negative impact on a credit
It is up to you to know what is on your credit report and keep the data up to date. You might have paid your bills on time, but your credit report may show that your credit is less than perfect. You may have had a credit dispute with a merchant that was corrected, but not shown on your report. You may have a bankruptcy that was not properly recorded. You may also have experienced credit fraud.
Over-Utilisation of Your Credit Card Limit: People often over utilise their credit card limits and this result in a high credit balance in their account. High balances on credit cards are also a cause of low credit scores. It is always better to pay your credit card bills every month. If you are not able to control your spending habits, then it may make sense to go for a card with a lower limit. This way, you will not build up a large debt and easily be able to pay all your dues. Another thing to note, credit card bills have a minimum sum to pay along with the overall outstanding. If you are unable to pay off the total amount you owe, it makes sense keep paying the minimum amount due until then.
1.3 million high school took dual credit college courses. A dual credit course is when a high school student takes an online class through a high school environment. This student will receive credit upon completion within both college and his high school giving its name dual credit. Some people think that this is a great opportunity for high school students while some think that it shouldn't be offered. Personally i think they are a very good thing and I plan to put them on my schedule next year just based off facts learned while researching but i will talk you through both sided thoughts. First, I will show you how dual credit classes make college a bit cheaper for students. Next, I will explain how it helps insure more high school students going to a higher education after high school. Lastly, I will talk about how it may provide an
Credit card debt is one of this nation’s leading internal problems. When credit was first introduced, and up until around the late 1970’s, the standards for getting a credit card were very high. The bar got lowered and lowered to where, eventually, an 18 year-old college student with almost no income and nothing to base a credit score on previously could obtain a credit card (much like myself). The national credit card debt for families residing in the United States alone is in the trillions (Maxed Out). The average American family has around $9,000 in debt, and pays around $1,3000 a year on interest payments (Maxed Out). Many people have the concern today that these interest rates and fees are skyrocketing; and many do not understand why. Most of these people have to try to avoid harassing collecting agents from different agencies, which takes an emotional and psychological toll on them. While a lot of the newly recognized “risky” people (those with a doubted ability to make sufficient payments) are actually older people who have been customers of certain companies for decades, the credit card companies are actually consciously targeting a different, much more vulnerable group of people: college students. James Scurlock produced a documentary called Maxed Out on this growing problem, in which Senator Jack Reed of (Democrat) of Rhode Island emphasizes the targeting of college students in the Consumer Credit Hearings of 2005
If you find yourself with a missed payment or two, it is very important to get caught up as soon as possible. Although older information will remain on your credit report, it holds less value than current financial activity. The longer you can go without missing a due-date, the less relevance y...
You should be laser-focused on your score when you know you'll soon need credit. In the interim, take care of your bills and use credit responsibly. Your score will reflect these smart spending
Instant gratification or easy access to almost everything is necessary, to have the right clothes and the right shoes, but usually they have no money to buy it with. This is where credit cards come into play, and where many individuals see credit cards as free money. They assume that they can buy it now, and of course, pay it later assuring themselves and their family that they will have the money. This comes down to responsibility; can college students handle budgeting their money? According to a study conducted by a Midwestern University shows approximately 66% of college students did in fact own at least one credit card. Some students can handle it and some can’t, it all depends on what priorities that person has. If buying a hamburger or new video game and not thinking about it is more important than paying that purchase off and establishing credit than those priorities are not good. Credit cards are just another factor in growing up. It 's learning what boundaries you have and what responsibilities are
just increase the problems. More kids drop out of college because of credit cards debt
...rnational students owe on all their credit cards, whereas, it does have significant positive impact on number of credit cards international students have. Moreover, country of origin does not have significant effect on credit card ownership or number of credit cards, but it does have effect on outstanding balances international students owe on all their credit cards. Also, Themba and Tumedi (2012) focused on the credit card ownership and usage in Botswana, and their association with demographics and attitude towards debt. The consequences of the study discovered that those who own more cards are more likely not to pay their outstanding balances in full. Results also showed that only age and gender seem to be significantly related to attitude towards debt where the youth and females are more likely than other demographic groups to have negative attitude towards debt.
When choosing and selecting a credit card it's important to remember that your introductory rate will only last for a specific amount of time before increasing. This change usually takes effect after six months to a year. Many consumers are attracted to theses low-interest rates unaware the issuer will later increase their rates. I think it's also important for credit card holders to know how to avoid paying interest on purchases. Unaware of these charges, consumers can quickly acclimate fees. They will not charge you any interest on purchases if you pay your entire balance by the due date each
In an article done by, U.S News and World Reports, the author looked into the many ways that issuers make money off credit cards as well as what gets people hooked into getting one. Today one late payment equals two penalties. Card holders can be penalized with two surcharges on one delinquency, and won 't have any idea until they 've been charged. These penalties can come in the form of a late fee up to $35, and a penalty rate (permanent interest increase). Once a cardholder forgets to make a payment they are easily caught up in a mess. The longer the card holder stays in debt the more interest credit card companies can charge, the more money they make, and overall the worse things get. In the past, card holders had a 5 percent minimum monthly payment. This was a problem for creditors because people were easily paying off their balances quickly. So the monthly minimum was decreased to 2 percent. With smaller repayment requirements, people are prone to spend more and accumulate more debt each month. Credit card companies also make money off of all the different fees that they have. An annual fee charges a customer every year in order to keep their accounts open. Another fee is the late fee that charges when a payment is paid late. A cash advance fee is a charge to access the cash credit line on a card holder’s account. Overall there are many ways that issuers and credit card companies make
Consumer Credit is defined as a debt that a person incurs for the purpose of purchasing a good or service. This includes purchases made on credit cards, lines of credit and some loans. Simply speaking, consumer credit is essentially a sum of money obtained by an individual to make a purchase of a non-investment good whose value depreciates quickly. Examples would include clothing, entertainment, automobiles and recreational vehicles. Some consider it a blessing that credit can be so easily obtained, while others see it as an impairment of our society. Cards can be crucial in cases of emergency yet millions of people are living beyond their means, drowning in debt while foregoing the discipline of saving for
Dr. Anderson and Dr. Card agree the need of college student have a basic understanding of credit cards before they enter the credit card world. This article was published in College Student Journal and is directed toward general public, but mainly focuses on college students. After providing the purpose of this study and explaining an overview of the credit card debt issue among college students, Dr. Anderson and Dr. Card report a detailed experiment in the article. Dr. Anderson and Dr. Card use formal language, well-constructed paragraphs, and build credibility to establish the differences financial education can make on college
College is when many of us spread our wings and leave the nest. Away from our parents and guardians that protected us from what was out there to hurt us. Commercial banks’ most favorite hunting ground is at college campuses. Young adults who have been told to get a credit card, or buy a car with an auto loan so they can “build credit” because that is a mature thing to do. Well here we are, American college students, ready to do what everyone is tell us to do, start a credit score. But is that really we should do? Obtaining a credit score is an important aspect of finance to many, but credit had developed into a virus after thousands of years that has affected Americans mindset, our behaviors, and how we will live our lives in the future. So
In the Article “Should teens have credit cards?” it states “It is better to operate on a ‘pay-as-you-go’ basis than use credit” (1). Spending a credit card is using money that a young adult does not have if they really needed to charge it to a credit card. It is safer to spend the cash that the teenager actually does have that way they do not owe any money to a credit card company. In the article “Should teens have credit cards?” it also states “Spending too much—a mistake easily made—an run up debts that it takes months or years and may even lead to a bad credit rating” (1). A young adult that uses a credit card instead of cash at hand is leading that young adult down a bad road. Using a card to pay for something that a young adult does not have the cash to pay for, leads to