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Two wildcats who manage
• Student: Andy Russell, UA senior majoring in business economics.
• Number of credit cards: Two. His parents pay the balance on one, which is used only for school expenses.
• When he got them: His freshman year.
• Why: The bank said he was eligible to get a credit card if he wanted one, and he figured, "Why not?" He was attracted to the notion of buying something and not having to pay for it right away, he said. "It's sort of a mixed blessing. It's good to build credit, and maybe I can get a home loan when I graduate," Russell said.
In the meantime, however, he pays finance charges. His debt is substantially lower than that of most students — at one time he ran it up to $500 but has since paid it down to about $250 — "but for me who didn't have a job it was a little bit of a problem," he said.
• Student: Molly Silver, UA junior majoring in journalism.
• Number of credit cards: One.
• When she got it: Last summer.
• Why: She wants to build her credit so when she graduates and gets a job again, she'll be able to do things like get an apartment, Silver said. There was no real enticement for her to apply.
"My mom has this whole thing about … she likes everything to be paid on time," she said. "She's real responsible with money, and she instilled that in me. So I was not allowed to get a credit card until I understood money and its value." Silver's car is in her own name because she worked and paid for it, she said.
Her mom pays her credit-card bill, so Silver is careful to use the card only for necessities, such as gas and groceries. Before charging anything else Silver calls her mom, because she respects how hard her mom works, she said.
Tips on credit management
"Students need to learn how to manage their finances," CreditCards.com representative Ben Woolsey wrote in an e-mail. "Credit cards and other borrowing options will continue to be available to them while they are in school and after they graduate.
Credit-card use and borrowing money have become common practices in American society and aren't going to cease. The wisest course is to teach students to limit credit-card usage and to borrow wisely."
Woolsey offered these tips for students to stay out of debt:
• Pay as you go. Don't put more on the card than you can pay off each month.
• Avoid putting routine purchases on the card. Try to use cash when possible and consider the credit card as an emergency backup for necessary purchases.
• Don't allow rewards/miles/cash back to entice you into using the card for everything and spending more than normal. This is a phenomenon the banks are aware of — that consumers actually spend much more with reward cards. However, paying interest on revolving balances more than wipes out any benefits from rewards.
• If you get into high-interest-rate debt, consider transferring balances to a card with a 0 percent introductory period — and use that grace period to pay down the debt. Avoid using that card for new purchases, unless it's an emergency.
Resources
• University of Arizona Office of Student Financial Aid: financialaid.arizona.edu/ or 621-1858
• Credit-Wise Cats: creditwisecats.org/ or 626-5376
• ASUA Legal Services: legal.asua.arizona.edu/ or 621-2782

Business

College students in debt's grip

With climbing academic costs, owing money is part and parcel of higher education for many modern-day college kids
By Shelley Shelton
Arizona Daily Star
Tucson, Arizona | Published: 08.26.2007
Long before college students walk into the sunshine of graduation these days, most are followed by a cloud of debt, much of it racked up on credit cards.
The average U.S. college freshman has $3,150 of debt — more than $1,500 of which is from credit cards, according to CreditCards.com, citing statistics from student-loan powerhouse Nellie Mae.
However, college seniors are racking up an average of $20,402 in total debt, of which $3,262 is credit cards. The rest is student loans.
With school expenses constantly on the rise — from tuition to room and board, textbooks and class differential fees — credit cards can seem both a savior and a curse for students operating on shoestring budgets.
"It all adds up. And when students don't see that many options they do have to look at other sources of income," said Student Regent and University of Arizona student David Martinez III.
Many times, Martinez said, students fall back on credit cards to supplement whatever their jobs can't cover financially.
Such behavior can profoundly affect the rest of a student's college experience, said Kristy Ruiz, program development specialist for Credit-Wise Cats, a campus organization dedicated to teaching students of all ages about fiscal responsibility.
Research has shown that getting into debt early can lead some students to feel increased stress and depression, and it can also affect what majors they pursue, Ruiz said.
"Some degrees cost a little more than others," she said.
A poor credit record can affect job prospects after graduation, as more and more companies conduct credit checks on job applicants, said Juan Ciscomani, senior instructional specialist for Credit-Wise Cats.
"If you're not on time with your payments, you probably won't be on time to my job" is the attitude expressed by some employers, Ciscomani said.
Research before you take on private student loans. Page D2 Sacrifice to overcome post-graduation debt. Page D2 Kirk Lyttle / St. Paul Pioneer Press 2005
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