William Penn Life, 2004 (39. évfolyam, 1-12. szám)
2004-05-01 / 5. szám
MoneywiSe Warn about too-good-to-be-true deals. Students should be leery of vendors who offer free t-shirts, Frisbees, and other giveaways to apply for a credit card or to enroll in a CD program. Students could wind up paying $25 a year for that credit card and paying for CDs they wouldn't have bought otherwise. Guard against credit card fraud. Inform teens to be careful with those credit card and Social Security numbers. They should shred receipts, outdated bills, and pre-approved credit card offers. They should also keep credit cards in a secure place and never let others use them. Make students aware of resources. Let your teen know that he or she can always come to you for help and that there are nonprofit, credit counseling agencies that offer consultations. To schedule a confidential counseling session with a certified credit counselor near you, call NFCC at 1-800-388-2227. Cover these points with your college-bound teen and he or she will be able to focus on studies and not be distracted by financial issues. |ff|>L| Money Links For more information about teaching your teens how to manage money, reduce debt and attain financial wellness, log onto the website of the National Foundation for Credit Counseling (NFCC) at: O www.nfcc.org To learn where to find credit counseling in your area, call the NFCC hotline: 1-800-388-2227. Seven things graduating seniors need to know about credit cards The High School Class of 2004 may have learned a lot about math, science, history and English during the last four years. But, many of these teens still have a lot to learn when it comes to credit cards. According to the National Foundation for Credit Counseling, many young adults allow credit card bills to get out of hand shortly after leaving home for college or a job. Many were charging without a plan on how to pay off their purchases. Before your teenager starts packing, be sure to share seven important credit card tips from NFCC. I. Credit card purchases are not free. Don’t let your teenager be fooled by the fact that no money changes hands during transactions. A bill will be forthcoming, and payment may be expected in 25 days or less. With a credit card, you are buying now and paying later. Each credit card purchase is like taking out a shortterm loan. 2. Credit card officials are keeping score. Teachers aren’t the only ones who give grades. Credit bureaus also grade consumers on how quickly they make good on their debts. Teens who pay their bills promptly will get good credit scores and can often get good interest rates on car loans and home mortgages. Teens who don’t may end up with bad credit scores and could have a hard time getting competitive or lower interest rates on future purchases. 3. There are cheaper ways to get a T-shirt. A free T-shirt or a Frisbee is no bargain if you have to sign up for a credit card with a $25 annual fee, an interest rate in the high teens and a short grace period. Selecting a credit card is too big a decision to make on your way into a sporting event. 4. Credit cards are not all the same. Explain that as a consumer your child should shop for the best credit cards available. That means learning what an annual percentage rate, a grace period, a spending limit and other credit card terms mean. Afterwards, go to web sites like www.bankrate.com and www.cardweb.com to compare rates. 5. Carrying a credit card balance is costly. Let your child know that he or she will be assessed interest once the grace period is up. For example, if your teen charged $ 1,000 on a credit card with an annual percentage rate of 17 percent and made only the minimum payment of $25 or 2.5 percent, he or she could ultimately pay almost $1,000 in interest. 6. Credit cards are helpful during emergencies. It’s hard for teens to budget for unplanned expenses like a car repair or a lastminute airplane ticket for family emergencies. When possible, students should pay their balances in full to improve their chances of being approved for credit during unplanned events. As a rule of thumb, students should only charge items they can pay off in 90 days. Otherwise, a small problem can turn into a big problem because of compound interest 7. Credit counseling is available. Let your teen know that he or she can come to you with credit card problems. If money management and credit problems continue, you can recommend that she or he contact an NFCC certified credit counselor by calling I -800-388-2227, or visiting www.nfcc.org, to locate a member agency in your area and to schedule a confidential appointment. NFCC members offer free and low-cost services to all consumers. Share these tips with your senior and he or she won’t have to learn about credit card debt the hard way. Williu Pen Life, May 2004 5
