Yes, we all have issues with the plastic devil known as the credit card. Whether you went on shopping sprees (guilty) or helped paid for school/books, you are probably still receiving friendly (or not so friendly if you are missing payment) monthly reminders for payment. Let me first start off saying when I entered college I was CLUELESS about credit cards. My parents would warn me to use my card only for emergencies. But back then, buying that dress for a party that weekend was an emergency. I would say, "Hey, all I have to pay is the minimum payment at a really low interest rate. No problem!" So I continued to shop plus pay for my books, which racked up to over $500. Now, if I read the fine print in my credit card I would have seen that once I reached over $500, my interest rate would skyrocket to 21%. Basically the higher the interest rate, the more money they are taking from your monthly payment and the less is going towards your actual debt. An exaggerated example would be, if you have a debt of $7,000 at a minimum payment of $230 let's say, over 100 dollars is taken from your payment for interest, and the rest left over is paid towards your debt. I had taken a class on credit cards my senior year and by that time I had already racked up over $10,000 worth of debt. The minimum payment I was paying towards my debt was basically paying the credit card company to keep me in debt.
Credit card companies target and scam college kids by luring them in with low interests rate (for the first $500, then after your interest rates skyrocket). If you are putting books alone on your card, that will probably cost you $500 right there. Anyway, I have learned that one way to help yourself beat the credit card companies is to pay more than the minimum payment, if you financially can. This way, more money will be going towards your actual debt. It will quicken the pace of lowering your debt. There are also other options that are out there that can help lower your debt as well, but BEWARE. There are scams in there as well. What kind of world would this be if there were no scams for us people. You can choose to do debt-consolidation, where you take out a loan to pay your debs. And, in turn you pay the loan at a much lower interest rate. Also, you can try doing a balance transfer on a credit card that has a lower interest rate. I would recommend this is you have debt under $3,000 because that is usually the limit they give you. Furthermore, make sure you go with a government-based credit union (which are usually free of charge) to avoid getting swindled. If you live in NYC check out this site for government-based financial empowerment offices: http://www.nyc.gov/html/ofe/html/home/home.shtml. It will be a beginning start to your debt management.
-Sophia
Credit card companies target and scam college kids by luring them in with low interests rate (for the first $500, then after your interest rates skyrocket). If you are putting books alone on your card, that will probably cost you $500 right there. Anyway, I have learned that one way to help yourself beat the credit card companies is to pay more than the minimum payment, if you financially can. This way, more money will be going towards your actual debt. It will quicken the pace of lowering your debt. There are also other options that are out there that can help lower your debt as well, but BEWARE. There are scams in there as well. What kind of world would this be if there were no scams for us people. You can choose to do debt-consolidation, where you take out a loan to pay your debs. And, in turn you pay the loan at a much lower interest rate. Also, you can try doing a balance transfer on a credit card that has a lower interest rate. I would recommend this is you have debt under $3,000 because that is usually the limit they give you. Furthermore, make sure you go with a government-based credit union (which are usually free of charge) to avoid getting swindled. If you live in NYC check out this site for government-based financial empowerment offices: http://www.nyc.gov/html/ofe/html/home/home.shtml. It will be a beginning start to your debt management.
-Sophia