Credit Card Importance There are many different topics about personal finance that are important to me but the one that sticks out is Credit Cards and Debt. This is important to me as a college student because Credit Card companies tend to target students. They do this because they know they are into the new trends and don’t always do research when it comes to interest rates, and polices that credit card companies have. Many students just sign up before reading what they are getting their self’s into. It is important to know everything about a credit card before signing up for example, the interest rates, et cetera. Also, another thing that you should know about debt is what it can do to your future if you are not carful.
First, you must know
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Having a credit card can be a great thing if you learn how to use it effectively. In the article The Case for College Students to Have Credit Cards by Erin Lowry she states that “Credit cards also offer students without loans the opportunity to establish their credit and spend four years proving they are responsible borrowers before graduation. Lest we forget, recent grads who don’t want to return to their parents’ basement will need a credit score to get their own apartment or house.” When you are in college or done, you should start to look for your own place, whether it be an apartment or a house you will need a credit score to be able rent or purchase a home. Credit Cards are amazing little plastic things if you think about it, but they can also not be a such a great thing. They can produce the small but big scary word that no one wants to think about; debt. In the same article by Erin Lowery she says “A credit card shouldn’t be used any differently than a debit card, except you have to pay your bill at the end of the month instead of automatically seeing the money get deducted from your account.” I couldn’t agree more. It is essential to understand this part of having a credit card because if you don’t repay your balance then you are just getting yourself in a sticky mess. Learning what debt is and knowing not to get yourself to far into debt is a “key to success” when …show more content…
This is important for many reasons. Young people should know the effects that credit cards can cause, also all the key components of a credit card. When learning about a credit cards you should make sure to learn about the interest rates, and risks involved with getting a credit card. You should be educated on the type of card you decide to get. Most importantly you need to be ready when you get a credit card because there are many risks involved, the big one being debt. The most important thing to remember is to stay educated and know what you are getting yourself into. You must see all the pros and cons to each situation you put yourself
I think it is important for students to learn about this topic because when students are new on campus, they tend to loose more money due to poor choices. College students need to learn how to use their money wisely since they have to pay for tuition, books, clothes and
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.
If you need money for something other than your living expenses, then credit cards and personal loans may be the way to go. If you need money for your living expenses, then you need to improve your budgeting, and you may benefit from an overdraft rather than a personal loan. An arranged overdraft may be suitable if you are having money troubles. If you are having trouble making ends meet, then credit card or personal loan is not the answer because they will increase your monthly outgoings, which will make it harder to make ends meet. Is one line of credit better than another?
When you graduate from college that is the time you start your life but many are not able to. Some people want to get married or start a family but cannot afford it at the time. By the time they receive their first check they instantly have to start paying their loans back. They are not able to afford rent/mortgage, utilities, or transportation because of it. Mishory O’Sullivan and Invincible (2012), “Found the average single student debtor would have to pay close to half of his or her monthly income toward student loans and mortgage payments. As a result, he or she would not qualify for an FHA loan or many private loans” (Elliott). A Survey ASA did on college students stated, “Student Loans were created to be an engine for social mobility, but they are, in fact, limiting young people’s ability to achieve financial success” (The Impact of Student). A student graduate mentioned, “Student debt weighs on every decision I make from
Within the class we use lessons from a man called Dave Ramsey who knows how to eliminate and stay out of debt. He has helped thousands of individuals and even started his own “university”, known as Financial Peace University, it’s a course to help ensure financial greatness in one’s future. If I apply lessons that I have learned and will learn from this, then perhaps I will be capable of having a stable financial future. One of the convictions he holds is that you should avoid credit cards entirely because they are a financial black hole. I find his view to be a tad extreme, yet it is founded upon solid principles and facts. Credit cards can very easily deceive one into debt. Some of the other ideas I’ve learned from consumer math include always having an emergency fund and putting money away for your future. While it is often tempting to spend the money left at the end of the month, it is very short sighted and provides little or no benefit for the
Most kids that have graduated high school have never been educated on the subject of personal finance, so they don’t know things like how to pay bills, or even how to do something as simple as applying for a job. According to a family friend of mine, Ron Hart; who happens to also be an award-wining author and TV/radio commentator, believes that students in high school don’t learn anything about how to get a job or get prepared financially. He states that, “ Students should prepare for a job. Maybe, instead of taking a fifth field trip to the Trail of Tears site, do one to learn about real jobs in an area they might want.” Hart believes that most basic high schools aren’t teaching students how to become financially stable for their future, which can cause major issues. He claims that “few schools teach about the value of hard work, ingenuity, gumption and entrepreneurship. Those lessons are as rare as Donald Trump bumper stickers in the faculty parking lot.” Hart also goes on to talk about how high school does not prepare you for life the same way college will. There are so many more lessons to learn there that people are missing out on. College is very important due to the fact that it will teach students more skills about finance and job seeking that most high schools don’t. In college, kids will learn how to save and budget their money, pay for their own expenses, and prioritize their needs verses their wants. Learning financial responsibility is also something that kids will carry with them throughout their jobs and their life. Having more freedom to understand the concepts of person finance will allow students to make mature decisions while easing their way into real world
When a person decides to engage in a higher education, such as college, they can get a good job and that in it can make a credit score go up. Going to college, can provide the necessary job training, skill set, or characteristics a particular job may need. A person with experience or the skills will most likely be chosen for the job than a person who posses only one of those traits or neither. Securing ones future financially has become one of the main focuses of this world. Securing a person’s future not only affects their present but it allows room for mistakes in the future or for financial difficulties in the future. In the 1920’s when stock markets crashed and people who owed banks money could not pay them back, they lost jobs and even homes. If one advances his education they can get a job, become stable in that job, save, and therefore secure themselves for any downfalls or instability that may occur in the future. In this world today life is not easy. Everyone is either trying to become #1 or is already #1. Going to college will better a person’s probability of having financial future
Not only the economic load increases with the credit card debt but it also decreases a person's credit score. You should be careful about the shortening of the credit scores. There are few lenders who need the credit scores for granting the credit
Statistics suggest about 32% of consumers are going to over estimate the rating on their credit, while only around 4% are going to under estimate the rating on their credit. Ones who will overestimate the quality of their credit are most likely less informative about finances overall, and will be more likely to have learned about their financial knowledge, unfortuanately, the hard way. Also the consumers who are going to overestimate the ratings of their credit will be less likely to properly budget, effectevely save their money, or learn to invest it often. With another example, in 1999 it was found that about 40 percent of mortgage borrowers didn't understand what the interest rates that were associated with their loans were.
Many financial experts totally hate credit cards because of how many people suffer from credit card debt. However, it can be a very beneficial tool for someone desiring to increase their credit score. A high credit score will allow you to buy a home, settle in a location and continue working on your dreams next to your babies. When you're figuring how you feel about them, consider these top tips for every first-time credit card holder. 1.
One might say there is a strong argument for the requirement of financial literacy for students in America. Americans continue to have increased balances on their credit cards as well as show a continued increase in bankruptcy filings according to statistics. Even the “baby boomer” generation is no longer exempt from financial hardships, as their generation has recently taken the title of “Fastest Growing Bankruptcy Demographic” from the 25 – 34 year olds (Linfield, 2011). Would it not make sense to say that Americans need to learn how to budget and borrow more wisely? Would not the best place to start be in schools? Well, the answer to that question is not a simple one.
Credit cards are much easier to deal with and carry around than a handful of dollar bills or a bulky checkbook. When you 're in a rush, credit cards come in super handy.
When shopping for your daily expenses such as food or shopping for yourself for a night out, no matter what the occasion is you always have the options on how you would like to pay with cash or credit. Everyone has their own opinion on whether they prefer cash or credit. I believe there are many pros and cons to each one but I prefer to use credit in many ways. There are many differences and similarities when it comes to convenience, safety, and expense for cash and credit. Which one is worth to use more?
If we don 't have credit cards, we can’t build our credit history. If we don 't have a credit history, we aren 't allowed to buy cars or houses with low monthly payments. Having credit cards is a cycle in life because without one thing, we can 't have the other. When people have credit cards they have to use them. It doesn 't help that banks offer many credit cards to people, ending in high debt. Banks also encourage low monthly payments. If people pay low monthly payments, they will never end up paying their credit card debt off. They will probably end up paying for the objects they bought, two or three times. People aren 't forced to pay high monthly payments in order for it to take longer to pay the card off. If it takes longer for a person to pay a credit card debt, the credit card companies will be making a lot of money. I can definitely say I have experienced this because I am always offered to get a credit card. There are many stores that carry their own credit cards, and offer them for their customers. Offers are tempting and they can add to a future of credit card debt.
In today’s world young people are using debt to live what they think is the easy life, buying unnecessary items to keep up with the latest trends, partying, and switching from credit card to credit card to pay off racked up bills. In my opinion young people lack the knowledge, and understanding of how credit works, and what it takes to keep up with the responsibilities of owning a credit card. Another reason young people are getting into debt is from college loans. Some students jump from school to school unsure of what career they want to pursue, and some jump from school to school using financial aid to obtain the luxuries they couldn’t normally afford. I think the biggest reason of all for the debt accrued in the early years of adulthood though is irresponsibility. Young people get into debt because they lack knowledge, have many student loans, and are irresponsible when it comes to handling debt.