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Appalachian students fall victim to credit card debt |
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Tuesday, 06 March 2007 |
Editor’s Note: This is the first of three profiles on Appalachian students dealing with debt.
Of 91 Appalachian State University students surveyed by The Appalachian, 9 percent reported owning three or more credit cards. Here is one of their stories.
 | Name: Frederik J. Kruger
Class/Major: sophomore, medicine major
Credit Cards: two Visas, one MasterCard
Current Credit Card Debt: $850
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Past Credit Card Debt: Last summer, Kruger faced his highest debt - $2,000 of unpaid credit card debt from a trip to his home country, South Africa. Kruger worked as a summer orientation leader at Appalachian State University, using every paycheck to pay off his debt.
“Last year I worried frequently about paying off my debt,” he said. “[But] I feel better now.”
Student Loan Debt: At the end of his undergraduate career, Kruger said he will have $20,000 in student loan debts.
“I am putting myself through school,” he said.
Planning
to go to medical school to become a cosmetic surgeon, Kruger is
realistic about his future debt. He expects to leave medical school
with $250,000 in student loan debt.
The trade off: a Doctor of Medicine to practice reconstructive face and neck surgery.
“I’ll live meagerly for a few years and put off buying a house and major things until I’m rid of my debt,” he said.
Credit Card Interest Rates: 5.9 percent fixed, 19.2 percent fixed and 23.4 percent variable.
Kruger
had his highest debt on the card with the highest interest rate, so he
applied for another credit card with a six-month, 0 percent Annual
Percentage Rate (APR). Kruger transferred his balance to save money on
interest.
Credit Card Limits: $500, $500 and $1,000.
Late Payments: One, by accident, but Kruger quickly realized and paid the night his payment was due.
Credit Card Purchases: Groceries, gas and occasionally travel.
Credit Card Advice: Kruger, after over two years of credit card experience, has a few tips for other young users.
First, “getting a credit card doesn’t double your income,” he said.
Second, he said, “keep an eye on your interest rates – they’ll kill you.”
Third, don’t just pay the minimum payments on your cards.
“You’ll never pay them off, you’ll just pay the interest rate,” he said.
Fourth, if you keep a credit card open, it will enhance your credit score, Kruger said.
Kruger likened credit card usage to binge drinking. They’re both coming-of-age choices that attract young adults, he said.
Expert
Advice: “Before deciding what you want to do, I would ask how you want
to live,” Scott Bilker, author of best-selling books on credit card
debt and creator of debtsmart.com, said. “If you want a mansion and a
limousine but want to be social worker, there’s a conflict there. Think
about how you want to live versus what you want to do.”
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