Credit card usage
among young adults is widespread and each year continues to grow. I was in my
late 20s when I obtained my first credit card, and it was due to having to have
one for hotel reservations and renting a vehicle.
Prior to this, all
my transactions were cash or check. When obtaining a credit card for the first
time, there comes with it much responsibility and safety concerns. Credit card
use now is common on college campuses. It is estimated 78 percent of college
students have at least one credit card, and 30 percent have at least four.
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| Credit card usage among young adults is widespread and each year continues to grow |
Managing credit
cards is a great responsibility and one that will have a huge impact on young
adult lives, as well as for older users. Financial habits developed at a young
age will lay the foundation that will last a lifetime.
Paying on time each
month or late payments will be recorded and will affect your credit rating. USA
Today reported college graduates, on average, owe about $19,000 in credit card
debt. However, many college students use credit cards wisely, and pay the
balances in full each month. A good rule to follow is, if you can't pay for it
by the end of the month, don't make the purchase.
Credit card debt is
one of the largest contributors to bankruptcy. Defaulting on credit cards will
be noted on a person's credit report. Credit scores determine the interest
rates a borrower will get on everything from a future credit card to the
purchase of a vehicle or future home.
An increasing
number of employers now are checking applicants' credit reports as a means of
determining the persons' responsibility and debt status. This is particularly
important for jobs that require handling money. To an employer, this
information is necessary to see if there could be a future risk for theft or
embezzlement.
Credit card fraud
is always a risk and can affect anyone who owns one. Each year, tens of
thousands of people are defrauded out of their money by con artists who prey on
the users of credit cards.
Common frauds used
today users need to be aware of include:
* A cashier who
skims a credit card used to make a purchase with a device hidden below counter
level, or copies the numbers using a pencil and note pad by scratching the
number on the pad.
* A fake company
promises it can lower an interest rate for an up-front fee charged to the
credit card. The fee is charged, and the company disappears.
* A credit card
company offers a card with terms too good to be true, an exceedingly low
interest rate and pre-approval despite the applicant's bad credit history. In
reality, the fees are so excessive and hidden by the fine print, the card is
maxed out from the beginning.
* When shopping
online, a purchase is made from a website, and the shopper authorizes a monthly
deduction only to realized other monthly charges have been placed on the
statement.
These tips can help
safeguard and manage your credit card, whether you are a first-time user or
have owned a credit card for many years.
* When you use a
credit card, keep constant watch on it. Make sure it is in your possession
after the transaction and that you get it back immediately. This will prevent
it from being skimmed by a dishonest clerk who may steal the data from it.
* Keep and save all
your receipts of transactions made during the month and compare them with the
charges made on the statement. Report any discrepancies immediately with your
credit card provider.
* Never lend your
credit card to anyone. You will be responsible for any charge that might be
placed on it. Always notify your card company of any change of address, and
when traveling out of your area, notify the company when and where you will be
going so any purchases will not place a red flag against your account.
* Very important!
Make sure you have sufficient funds to cover your monthly payments. The
interest rates on credit cards are high. Just paying the minimum amount on the
monthly statement will cost you in the long run. Bottom line, if you don't have
the funds to pay the monthly statement, don't make the purchase. I know
emergencies can happen, however, many people have gotten themselves in trouble
by convincing themselves the payments will get caught up in a few weeks only to
have the card charges escalate on them.
In conclusion,
check your credit reports often to make sure the information is accurate and
that no one has used your credit card information to make purchases in your
name. You are entitled to one free credit report per year from each of the
three major credit bureaus -Experian, Equifax and Trans Union.
Commentary by Steven Parker
Steven Parker, a national voice of McGruff the Crime Dog, is a retired crime prevention officer for the Des Moines County Sheriff's office. His column appears in rotation with Des Moines County Conservation's Chris Lee the fourth and fifth Fridays of the month.
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