College Students Warned Against Credit Card Trap

November 19, 2007

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• Iowa's lawyer full general is warning college pupils to avoid the campus recognition card trap.

“Credit card companies badly desire the concern of college students, so pupils are flooded with recognition card offers,” Uncle Tom Glenn Miller said. “Unfortunately, more than than and more pupils are slipping into high recognition card debt with very serious long-term consequences.”

Miller said surveys bespeak high debt is forcing some pupils to take on more than paid work and cut down their academic loading or even drop out of school. He noted that an decision maker at Hoosier State University once said, “We lose more than pupils to recognition card debt than to academic failure.”

High debt or a mediocre recognition record also can ensue in pupils paying higher rates for auto loans or place mortgages, and Pb to psychological jobs from emphasis to suicide.

“Whatever you do, don’t be seduced into obtaining respective recognition card game and ‘maxing-out’ on them with a high debt load,” Glenn Miller said. “And don’t drama the recognition card shuffling â€" using progresses on one card to pay down another.”

Miller said recognition card game can function a intent â€" they are good for emergencies, and national recognition card game can assist construct a good recognition record. “But if you make acquire a recognition card, find what you can realistically afford to pay each month, and program to pay off your measure completely each month.” Shop around

Miller said that before pupils take a recognition card, they should shop around carefully.

“Some card game are highly seeable on campus because they have got selling rights,” Glenn Miller said, “but pupils still should shop for the card with the best footing for them.”

Customers should compare involvement rates, stated as the April or yearly per centum charge per unit of interest. Glenn Miller cautioned that some low “teaser” rates only use for a few calendar months as an introductory offering â€" then much higher rates kick in. He also encouraged pupils to avoid card game with high punishment rates â€" rates of 20% Oregon even 30% if the card holder loses or do a late payment.

Miller said clients should look for concealed fees such as as late-payment complaints and over-the-limit fees.

If a pupil makes obtain a card, Glenn Miller said, it is important to avoid the revolving-debt trap.“Don’t believe you can avoid problem just by making the lower limit payment each month,” helium said.

He gave an example: State that you do only minimal payments and you run up a $1,000 balance on a card with a 13% April (annual per centum charge per unit of interest.) Even if you never utilize that card again, if you go on to do only minimal monthly payments you will still owe over $500 three and one-half old age later -- and paying off the debt will take over six years. (It will be much worse still if you are late on some payments and the card issuer raises your charge per unit to 21% April or higher.)

“What's the underside line?” Glenn Miller said. “Consider whether you should just state no at this clip to getting a recognition card and taking on debt -- especially if you already have got significant pupil loans to pay off. If you make acquire a card, be extremely careful in selecting and managing your recognition card account.”