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Giving Your Credit Cards too Much Credit?

Your college years will be some of the most broke years of your lives. College is all about expenses: from tuition and housing, books and supplies, and to just eating. On top of that, if you are a full-time student, between classes and homework you are not left with much time to work. So, unless you receive funds from your parents every week, you are pressed to make the same mistake many students make — open a credit-card account.

If you are an English, psychology, or biology major, then books will be your life. Books for your different classes can range in price anywhere from $10.00 to $150.00 apiece — and maybe even more. So when you’re standing in the checkout line with a stack of required books it feels great to swipe that beautiful looking piece of plastic. It hurts a lot worse than handing the cashier a wad of Benjamins. But as you go beyond the book store and start swiping that card at other stores for clothes and food, and then some CDs and posters, what you’re not realizing is that it can hurt you.

So here’s the lowdown. When you apply for that first credit card, many credit card companies will automatically charge you an origination fee before you can even use the card. My fee was $100.00. Some card companies also charge you an annual membership fee; mine was $50.00.

The card finally arrives and you head to the mall. As you’re happily leaving stores with bags full of goodies, thinking you just got something for nothing — you’ve fallen for the biggest misconception a lot of us make. Because when the next month’s credit card bill comes around, unless you’ve paid off the balance in full, you’ll see that the balance may include not only what you bought, but also interest rates and fees. Additional fees could be a late fee, the annual fee, or a transaction fee.

Now you are in a situation that seems to never end. At least that’s how I felt when my credit card of just a $200.00 limit felt like it was sucking me dry. One day I thought to myself that no matter the amount I paid every month, my balance seemed to be frozen at $100.00 or more. So I took out my checkbook and paid off the whole balance…felt great. My happiness lasted about a week-and-a-half, and then I was charged $5.00 protection fee —which led to a repeat of the whole disaster. And, like many others, I did not think to myself, “Let me cancel my credit card,” I thought I needed to get another credit card with a larger limit. And so I got one…needless to say I’m in the same mess, but now with two credit-card balances.

The problem, I think, is how easy it is to get credit cards nowadays. You don’t even have to go out of your way to apply — the applications just come to you. All the time I get offers in the mail telling me I’m pre-approved. Companies give you a choice between so many adorable designs, the reply envelopes do not need stamps, and sometimes you don’t even need to walk to a mailbox you can accept the terms right on-line. And then there are all these eye-catching phrases, for example: Get more, more, more…for less, less, less. Another bribes you with NO ANNUAL FEE, and then there are invitations to Earn 20,000 bonus miles. It’s all so tempting, you have to have strong resistance or learn the hard way.

Sure there are those of us who absolutely need credit cards — and they are nice to have. But, word of advice, only use it when you need it and for nothing more. I once had a friend of mine tell me he was $4,000 in debt and he said it so carefree; maybe he didn’t realize it, but at the age of 21 his credit history might be already ruined if he doesn’t make his monthly payments on time. I’m realizing that having a good credit history is such a huge part of everything you’re going to want to do in your future, like buying a house or a car, so don’t let that piece of plastic ruin your good name. Do not use your credit card when you have the cash just because you don’t want to hand over the green. It’s not worth it. Trust me, I’ve done it.

Martine L.
PT Intern
Boston, Massachusetts

* A partially reprint from Positive Teens magazine Volume 7, Issue 5, October 2005

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