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Appalachian student circumvents credit card debt |
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Thursday, 08 March 2007 |
Editor’s Note: This is the second of three profiles on Appalachian students dealing with debt.
The overwhelming majority of student credit card holders surveyed by The Appalachian had some type of debt. A few students responded that they have no debt. Here is one of their stories.
Name: Matt R. Ormsby
Class/Major: junior, criminal justice
Credit Cards: one Visa
Current Credit Card Debt: $0. Debt is paid in full each month.
Student Loan Debt: $0
Credit Card Interest rate: 21 percent
Credit Card limit: $12,000 - “If you keep paying it off, they raise the limit like crazy,” Ormsby said.
Late Payments: Never
Credit Card Purchases:
Groceries and gas – Ormsby takes advantage of a Citibank credit card
usage offer that pays him back 5 percent spent on gas, 3 percent spent
on groceries and 1 percent on all other purchases.
“Basically, they pay you to use it,” he said.
So far, Ormsby has made $200 from using his credit card because he pays his full balance each month.
Result of Debt: Ormsby hopes to buy a car easily with his good credit report.
Credit Card Advice: In response to the increase in student credit card
debt since 2001, Ormsby remembers, “It was not too long ago that
parents had to co-sign for a young adult to get a credit card.
It’s much easier to get a credit card these days.”
Ormsby said with the easier access should come financial responsibility, which he said his parents taught him.
People might look at credit cards as free money, Ormsby said, but if you don’t have money coming in, they’re dangerous.
Expert Advice: Scott Bilker,
author of best-selling books on credit card debt and creator of
debtsmart.com, said the earlier a young adult gets a credit card the
better.
“Kids need to get used to electronic money because that’s the future. I
just got my kids, who are 15 and younger, regular savings accounts so
they can begin to look at accounts online,” Bilker said. “I would
recommend parents put their kids on their credit card; make them users
as soon as they can, to monitor usage, make sure payments are on time
and teach proper use of credit.”
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