Does the phrase “bad credit” already apply to you or any of your friends? College students across the nation are unknowingly or apathetically building bad credit for themselves.
The biggest mistake most students make is when it comes to using a credit card. Without any discipline or knowledge about maintaining good credit, many students get off to the wrong foot by accepting every offer in the mail and taking advantage of the “plastic magic” that pays for everything so easily.
“Unfortunately, you do need to have some type of credit history,” said Charles Campbell, professor of economics. “It affects you when you’re ready to buy a car or purchase a home. It’s like a reputation which needs to be protected.”
Campbell said students should have one credit card with no fee along with one debit card and treat them exactly the same way. This allows for some credit to be established as long as each card is paid.
Other mistakes students tend to make include not paying their cell phone bill on time, whichcan affect them down the road and overdrawing their account. Even small amounts of credit that are not taken care of can turn into a nightmare and haunt someone for what seems like forever.
“You’re going to make mistakes,” said Wayne Kelly, associate professor of finance and economics. “It’s a normal course of life, but what students don’t realize is that they need to fix these mistakes while they still can.”
In the United States, under our social and economic conditions, it’s easy for most people to obtain a credit card. With credit being so available, it’s easier to blow money than to acquire it. This creates a problem for many.
By paying all bills on time, keeping track of withdrawals and spending only what is available, one can begin their financial track in the right direction.
“Use common sense,” Steve Taylor, the president of Bankfirst of Starkville, said. “The key is to not accept more credit than you can pay, which means being consistent and responsible.”
“In general, in the real world, when you use a credit card correctly, you’re actually just rearranging credit, not creating outstanding debt,” Kelly said.
“But if you’re not able to pay off your credit cards, you are indeed accumulating debt,” Taylor said.