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Oh, how I wish I had practiced
what I preached
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"And how will you be paying for that? Cash, check, credit,
or your right arm?"
It may not seem like it, but getting in debt is a lot like selling
parts of your body. Now I didn't just write that so that you would
read this article - but I'm not going to cry if it works - for the
fact is, as the Bible clearly states,,, the borrower is servant
to the lender" (which is why I am considering a career in banking).
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For incoming students, the reality of borrowing tons of
money to attend college is a sobering thought, and it should
be. In addition to school loans, which you acquire in a trade
for an education, there is an even greater evil… and
no, I'm not talking about the Antichrist - or am I? Ha ha
ha ha!! Umm... Anyway, the evil I am speaking of is credit
card debt. After being released from the auspices of my parents'
abode (I was kicked out of my room) I, too, was unprepared
to resist the wiles of <sniff> a line of credit. After
checking the Greek, and exploring the etymology of the Latin
phrase "la creditobus linus," I discovered that
"a line of credit" does not mean "free money."
In fact the closest approximation to "free money"
would be "other people's money," also known as "governmental
handouts." Believe it or not, these phrases come directly
from the Latin.
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So about the credit cards. Simply put, "a line of credit"
means an imaginary line made up of equally imaginary credit... oh,
you're welcome. The trick is, as you spend this pseudo money you
go into a very real debt. Much like a noose is made of a line of
rope, so a noose of debt is made of a line of credit. Again, there
is no need to thank me for that literary analogy - it's my job.
To break with the traditional role, I shall actually apply what
I have written to the real world. Call me a rebel if you must, but
a man has to do what a man has to do. As a college student you are
considered a good credit risk. Credit card companies can make a
lot of money off of you, if you will simply fill out and return
the pre-approved applications that you are given. At this point,
some may wonder how a credit company will make money off of you.
Simple, you will pay them ungodly amounts to borrow their money,
so you can have the newest neon green CD player.
Now, it is a good idea to apply for a couple of credit cards to
establish a good credit record. Credit cards are also handy for
emergencies and are safer then carrying around cash, which is not
a problem for us college students - but if we were to ever have
any cash, then remember that credit cards are safer. Some credit
cards will even take your photo and signature and put them right
there on the front of the card. This, I've found is a good way to
impress the women folk.
However, there are major drawbacks to the credit cards. I like
to call it the "credit card conspiracy." It probably isn't
a conspiracy, but if I call it that, it adds some mystery and enchantment.
Basically this mistitled "credit card conspiracy" involves
two, count them, two factors: interest, minimum monthly payments,
and it is easy to overspend plastic money.
I must now proceed to interrupt this well-constructed article
down with some cold hard unfeeling reality, and I hate to do it,
believe me. According to Adam Sewards, Manager of Transportation
and Motor Pool, the typical college student is four to five thousand
dollars in debt to credit cards by the end of their college career.
And unlike a school loan, which accrues a mild interest of five
to eight percent a year, a credit card loan takes an almost demonic
18 to 22 percent compounded interest rate a year. Compare this,
annual rate to the three to four percent you make on your money
if it is in a sayings account and you can readily see the folly.
Another little technicality that I was ignorant of before I began
my investigation (Ha! To all of those skeptics who said I never
researched my articles - you were right, it does help) is that unless
you pay off the entire new balance of your credit card, the credit
company will charge you interest on the whole amount. For example,
if you charge $500 on a card and pay $499, leaving a balance of
$1, the credit company will charge their rate of 19.99 percent on
the entire amount of $500 for that month (this would be an $8 interest
charge). Sewards encourages ORU students to defy those would-beprofiteers-on-poor-college-students
by tearing up the first pre-approved application they receive. And
if you do hold credit cards, treat them like an American Express
(which you must pay off each month). Sewards also warns against
the special introductory credit cards. Although they will entice
you with a small 6.9 percent rate, this rate is, as its name suggests,
only introductory. Within six months, this rate will be joined by
another 12 to 14 percent.
So as I conclude this little ditty, I shall revert back to an
old journalistic tradition - pithy clichés. Think with your
brain and not your wallet. If you must use your credit cards, practice
safe credit practices. Don't overspend. Treat your credit like real
money, because that is what it is. Don't use credit cards unless
you have the money to pay off the entire balance. Don't lose your
credit cards, and if you do please remember where you lost them.
Don't give your credit card number to solicitors, unless they are
a reputable Tupperware dealer. And if you must purchase some expensive
needless triviality, don't.
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