Paper vs. Plastic

Courtney Garloff, Print Editor

Students often find it easier to pull out the plastic than count out the cash when making purchases.

Many students have credit cards stored away in their wallets. Some may use them in emergency cases while others may use them on a regular basis instead of cash or check.

But none of them know for sure whether swiping or even having a credit card is a good idea at a young age.

“I use my credit card to help me pay for things when I don’t have cash for it right at that moment. I also like that it helps me build credit,” said sophomore business major Jen Mathiesen.

Having good credit is the basis for a solid credit score – and sometimes even a background check that prospective employers may run when they make hiring decisions. Loans may be denied if the borrower has no credit or bad credit.

Many major credit card companies offer cards aimed at students. Citi and Discover offer cards with an annual percentage rate (APR) of no more than 23.99% depending upon the credit-worthiness of the student. Paying off monthly balances of making student loan payments on time can help students to establish a credit history. Making small purchases and paying them off right away is important to establish good credit, according to business professor Timothy Kearney.

“If students have income of their own, there is no reason they can’t have credit cards with low limits,” said Kearney.

He believes if students have jobs and the means to pay credit card bills, there is no reason to forego a credit card.

“Credit is something that must be learned. You have to use it to understand it,” said Kearney.

Some students say credit cards ease travel and they can be used across the globe much easier than cash can.

“I used my credit card while I was in Italy. It was a lot easier than worrying about converting cash all the time,” said sophomore business major Sarah Pulice.

It may be very tempting to use a credit card for everything and not pay it off until later. This can lead to falling behind on payments and bad credit.

“I think that slowly but surely credit cards will take over as the main currency and will start to take out cash altogether,” said Pulice.

Many major student credit card companies offer incentives to holders who pay their payments on time and have a high GPA. They offer 1% and 5% cash back when purchases are made with that card.

“With my card I get cash back when I buy things. It’s great to get a little money back when I buythings,” said Mathiesen. Credit card companies often offer an introductory period with 0% APR for a period of time to help lure new cardholders. That rate expires after a period of time.

Some cards like American Express Serve don’t require any credit history, while Discover’s It card requires fair credit and Citi’s Forward requires good credit.

Card holders should check credit reports regularly to know exactly what their scores are. There are many sites online to check credit reports and scores, and while all cardholders are entitled to one free report per year, some sites charge fees for the information.

Card users should set monthly payment reminders to make sure they don’t miss any payments.

“I always try to pay off my credit card balance everyone month to avoid missing a payment,” said Mathiesen.

Cardholders should always try to reduce – or eliminate – debt.

Kearney also suggests that students watch and read financial news sources to become more fis- cally responsible. Being informed about what is going on in the world, he said, will help them to make good money decisions.

[email protected]