Credit card newbies: Don’t become a debt head
January 23, 2012 | Alliant Credit Union
Congratulations if you're new to the world of credit card transactions. You deserve extra praise if you're a wise manager of your money and use a card that offers a great deal, such as the Alliant Platinum Rewards VISA®. Just don't go overboard. Beware of the perils of plastic!
Eighteen to 24 year olds are "Generation Broke," according to a recent study by the New York research group Demos. About 55 percent of college students get started with their first credit card during freshman year, the study says, and by year's end these young people carry, on average, a $3,000 debt. Many students are in debt up their eyeballs and it will take years - maybe decades - for them to dig out of their financial hole, if at all. Ouch! And there's more bad news: a major U.S. university reports that more of its students drop out because of credit card debt than failing grades.
What can you do about your own situation? Stay cool and in control, for one thing and keep this forever in mind: a charge on your card is a loan. And it's not from the Gentle Bank of Mommy and Daddy. Rain or shine, the balance on your card must be repaid. So, before you make any purchase, ask "Would I go take out a loan for this?" Despite the horror stories, prudent use of a credit card is a good thing. Using your plastic well gives you the opportunity to establish an enviable, strong credit history. Make that your goal.
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