Broadside Opinion

Michael Foley, Broadside Correspondent

As you read this, college students nationwide are irresponsibly managing their finances. Last year, the average college undergraduate carried $3,173 in credit card debt, the highest level since the data was collected in 1998. In 2004, college students had on average $2,169 in credit card debt.

With college costs surging and the cost of living in the D.C. area increasing, the need for more education in personal finances needs to increase as well. As a peer educator for the Are You Credit Wise? financial literacy program, I would like to lend a few tips on how college students can better manage their money.
I’ll start with the basics: credit cards. It can be your savior in an emergency or the devil in disguise.

With today’s job market becoming more competitive year after year, employers are beginning to pay special attention to an applicant’s credit score to see how responsible they are at handling their finances and, in some cases, their life.

Let me give you the most commonly disregarded trait about a credit card: interest rate. If you were to charge $1,000 to your credit card and only make the minimum payment each month, it will take you five years to pay it back. You end up paying more than $1,000 due to interest rates, not to mention all the additional time you will spend paying it back.

For now, take the following tips with you on the road when it comes to knowing your credit history, managing your credit and debt and budgeting.

Your Credit History:
-Know what a credit score is. It’s pretty much an evaluation of an individual’s credit worth. Scores range from 350 to 800 and remember: the higher, the better.

-Lenders will review your credit report to see if you are a good risk. Do not put yourself in a bad light with these lenders. It could mean not receiving a loan for a car, a house and more.

-Improve your credit history by paying your bills on time, paying off your debt entirely instead of moving it around and not opening unnecessary lines of credit. You are entitled to receive your credit report from each of the three major credit bureaus once per year. Go to www.annualcreditreport.com today and get yours.

Manage Your Credit and Debt:
-When it comes to credit card bills, pay more than the minimum. If you’re going to be late with your payment, call the credit issuer and let them know.

-Know your interest rate. This might bump up the pressure to pay more each month and to not use your credit card as much.

-Not all credit cards are the same. Like finding the right pair of shoes that’s your size, you have to go out and find a credit card that fits you. Flexibility, interest rates and late payment policies should be three of the most important aspects of a credit card you’re trying to find.

Budgeting:
-Budgeting is nothing more than a balancing act. Cut your personal expenses to make your budget work. Keep track of all your checks written, bank fees, ATM withdrawals, ect.

-You want to look at your spending and compare your needs and wants. Do you really have to eat out that often? Control impulse spending.

It has been predicted that our generation will be hit the hardest with the growing national debt.

Economists believe that our generation will be forced to pick up most of the tab. Putting everything aside, we will be met with an economic challenge that will test our personal responsibility to manage our credit and budget our finances.

You have an opportunity to set yourself above the average; make the right decisions when it comes to your money and become credit wise.