Students face credit challenges

By Asheley Riley
For the Daily

KELLY MCKINNELL/Daily Using her credit card, a University student buys a few items at Ulrich's Bookstore and Electronics on E. University Street. Credit problems plague many students..

When students first step onto campus, they are attacked by a barrage of credit card companies, banks and telephone services all promising gifts and bonuses for new customers.

Many first-year students are excited to learn that just by signing a piece of paper they get a piece of plastic, which guarantees $500 -$5,000 worth of credit.

But students may not want to rush to the mall yet.

"Students who spend money on things they don't really need shouldn't have a credit card," said Katie, a First of America MCard representative.

"Credit is good only if you are very responsible with it. Once you're in debt it can be a never-ending battle," she said.

Small bills and unexpected purchases can add up quickly for students new to college life.

"Well, I spend a lot of money on food, that bothers me a lot," said Talli Saltzman, a SNRE first-year student.

Dana Fair, a publications coordinator for the University Housing Information Office, suggested that students keep a careful track of their financing.

"Make a weekly budget, how much you are going to spend on going out, books, clothes, etc.," Fair said. "Get in touch with your financial aid department if you are having real trouble managing your money."

Some first-year students seem rather optimistic about their brand new credit histories.

"I haven't bounced any checks yet, because of my check protection program, so I am planning to apply for more credit," said LSA first-year student Theresa Vidalon, who's a patron of The Michigan Credit Union.

Vidalon said she prefers The Michigan Credit Union over First of America's plan because it offers cheaper per-check rates.

Fair said the MCard may be a good alternative to credit cards for students because they will not be tempted to spend cash, and they can only use the card at certain stores and restaurants.

Credit cards are more than just delayed payment for purchases. Most companies have added fees and interest rates if patrons don't pay their bills completely or on time.

"If you want to spend $5 on a snack at the gas station, it can end up really costing you $10 if you don't pay it on time," LSA junior Chris Traugott said. "I also bounced a lot of checks my first year."

Trouble can arise just by using a checking account. Students still have to keep track of various bills and a checking account balance.

"If you aren't keeping track of all your purchases, especially if the money's your parents', you can easily spend $200 on snacks alone," LSA sophomore Martin Bruce said.

09-19-97