Debt Chemotherapy

We read that Universities are starting to ban the presence of Credit Card companies preying on innocent young adults. There are no shortages of tricky ways that credit card companies get them to sign up for their cards, including free lunches. Remember, there is no such thing as a free lunch. Now they are at the mercy of the creditors and they can blast up the interest rates to 30% for no reason at all.

What’s more shocking is that ABC news reports that 43% of undergraduates have at least 4 credit cards and owe over $2,000! Some people have committed suicide over credit card debt, which is really sad, because it’s just funny money.

If you are young, they don’t teach you anything about managing your finances in school, so here are a few tips to help:

1. Build your credit score by getting one card and using it occasionally, and keep the balance low.
2. Don’t let your parents pay for your credit cards. It does not teach you responsibility, and leads to irresponsibility in the future. It’s your debt, if you don’t want to pay it, don’t charge it; use cash. This is not free money.
3. Pay your monthly bill before the due date to prevent fees and increased interest rates. It’s important to give it time to get there if you mail it. The best way is to pay online so the payment is that day or next.
4. Set up checking and credit cards at a school credit union, because the interest rates are usually lower and they don’t raise them as high as the credit card companies. Then set up an automatic payment of say 5-10% of the balance, this way you won’t forget.
5. Be frugal; don’t buy what you don’t need & pay cash when you can.

Keep an eye on your finance charges & if they start going up, call them to complain and keep trying until they lower the interest, though don’t close the account, as it will lower your credit score because you lower your available credit and raised your debt to income ration. We will explain this in detail in a future post.

Christopher Winkler
Debt Settlement Expert
DebtChemotherapy.com