Page 332 - Keys to College Success

get analytical

EXAMINE CREDIT CARD USE

Complete the following on paper or in digital format.

Take a careful look at who you are as a credit consumer. Gather your most recent credit
card statements to prepare for this exercise. Answer questions 1 through 5.

1. How many credit cards do you have? For each, list the following:
■ Name of card and who issued it (for example, VISA from Home State Bank)
■ Current interest rate
■ Current balance
■ Late fee if you do not pay on time
■ Approximate due date for card payment each month
2. Add your balances together. This total is your current credit debt.
3. How much did you pay last month in finance charges? Total your finance charges
from the most recent statements of all cards.
4. Do you pay on time, do you tend to pay late, or does it vary?
5. Estimate how many times a year you pay a late fee. Looking at how much your
cards charge for late fees, estimate how much money you spent in the last year in
late fees.

When you’ve gathered all your information, analyze how effectively you currently use
credit. If you are satisfied with your habits, keep up the good work. If not, identify your
bad habits and write specific plans about how to change those habits.

■ Keep an eye on your credit history. Building, maintaining, and repairing credit is
an ongoing challenge. Three primary credit bureaus (Experian, TransUnion, and
Equifax) will send you a report containing your credit score and credit history. You
can obtain one free report per year, but charges are incurred for any additional
reports. For more information, see AnnualCreditReport.com.

Overreliance on Family Support
The majority of four-year college students are considered dependents of their parents
or guardians throughout college. For many of these students, it’s easy to fall back on
family support when money gets tight or runs out. When you are used to your family
providing for you, you may be comfortable with that arrangement and not want to
take the reins.
However, there are drawbacks to continuing to depend financially on your family
the way you have until you entered college. For one, money management, like so many
other skills, is learned through practice. If you have no experience managing your
money during college, you will be unprepared for living on your own after graduation.
Your family may also expect to stop providing financial support after you graduate. If
you gradually wean yourself from that support over the course of your college career,
you will be more ready for financial independence than if you stay dependent and have
to handle being cut off suddenly.

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