Credit Cards

Too Young for Credit?

A young newly licensed driver was given her parents gas card for the local gas station. Upon receiving this card she was told to use it in moderation. One month and several road trips later her parents received the bill from the local gas station. After much yelling and screaming they took the card away and she no longer had access to the charge card.

Easy Money?

Another college student, in Austin, Texas said she had 18 credit cards and a $12,000 balance, “I guess I used the cards to get stuff I want but don’t need or can’t afford

Consumers today are using those cards for just that, splurging. For example a 21 year old part time student racked up a total debt of about $4000 over the course of a couple months. Business week magazine reports that 32 percent of students at four-year colleges have credit card debt. Of these students 31% owe more than $2000.

Feel the Pain

Mike SchianoVice President for InCharge Education Foundation, said one reason it seems that we need them is so that we can have the things we want “now” It gives us that feeling of “instant gratification” that we all look for. Schiano also said that it is the power to have “what you want, when you want it,” without waiting. One reason why we have turned to plastic Schiano said is because “using plastic involves less pain, for example, if we use cash we actually physically feel and see the money leaving; with plastic we don’t get that feeling.”

Good Debt

Not all debt is bad debt, said Schiano, home loans, car loans and starting a business are acceptable kinds of debt for most people these things are virtually impossible to have without going into debt. However consumers that are out there just racking up debt and not really making an effort to pay it off within the next two or three months is considered unsecured debt and it needs to be taken care of immediately or it will become a burden. One reason why this happens, Schiano stated, is because “we no longer have to work to save for the things we want.” Everything can be put on plastic if we have the credit limit.

Copyright © 2005 Allan Olson

April 26, 2005