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The Dangers of Credit Cards
| Credit cards are an
inevitable factor in growing up. Once you turn eighteen it all starts. You
receive applications in the mail daily and commercials appear on television as
well. This starts to spark an interest. So you say to yourself, "I think
I'm responsible enough to get a credit card, I'll only use it for
emergencies." Then you apply and it may take a couple times to finally be
approved for one. This only makes it worse, of course, because you realize how long
you have waited and now you get to buy anything you want, after all you don't
have to pay it off for a month. The year is 2001, more and more teen's own
credit cards and are already establishing their credit history. This essay will
prove the truth about credit cards and what it's like to be in debt. It will
also show the easy ways in which commercials and credit card companies can lure
you into debt. Credit cards seem to be the easy way to purchase things. If you want a pair of pants but don't have the cash, you can just charge it. In reality, credit cards are not that easy. Once you are approved for a card the company gives you a credit limit, which is proportional to your income. On the average, an eighteen year old would have about a $250 limit. Which is good because it means teenagers cannot charge past the maximum amount of money. When a credit card is maxed out it means that you have hit the highest amount of money you can spend and it won't let you spend anymore. A month later when you receive your bill, the full amount will be shown and the minimum amount owed. The minimum amount is a feature on a credit card that allows the buyer to pay only a certain small sum of the money. For example the bill is $222 and the minimum amount you can pay is $15-$25. If you choose to pay the minimum, the interest value comes in. Each time you don't pay in full, interest rates are charged onto the original bill. This is how people with credit cards run into debt. People just pay the minimum each month, but also keep charging until it's maxed out. This can have serious effects on your credit history as well. "Your credit history is very important, as it stays with you wherever you go. Your credit history lists the credit cards, how much you owe, and how timely your payments were"(Visa Student p 1). The main reasons that young adults get into debt are because of their consuming passions. Teens want everything, the right clothes and the right shoes, but usually they have no money to buy it with. This is where credit cards come into play. Many individuals see credit cards as free money. They assume that they can buy it now, and of course, pay it later assuring themselves and their family that they will have the money. This comes down to responsibility; can teens handle budgeting their money? Some can and some can't, it all depends on what your priorities are. If buying a Prada backpack for $100 is most important, than you better find a way to pay that off in a month. Credit cards are just another factor in growing up. It's learning what boundaries you have and what responsibilities are important. The steps of getting out of debt are few and simple. One is to stop spending money you don't have or limit the usage of your credit card. The debt will never get cleared up if charges keep appearing on the bill. Another way is to limit the amount of credit cards you own. Stores will try and get you to sign up for their cards and they do this by offering deals. The more cards you own the more you are able to spend, which will lead you right back into debt. Also, a good idea is to pay as much off as you can each month. You don't have to pay it in full, but try to at least pay more than the minimum. Debt is all over the world, it's not just teenagers, but teens seem to lack the understanding. Debt is possible and teenagers need to realize how to manage their money before they get older. Credit Card companies are running a business. They make money off of the consumer, who doesn't pay their bills. Credit cards are nice to rely on but in reality they are a scam. Companies want the consumer to max out their card, so then the companies can add on the interest rate, which they make money off of. Therefore it's up to the consumer to know their limits. Instead of credit cards, Debit cards have become very popular. These work well because the consumer can charge an item but it comes right out of their checking account. Therefore they know how much money their eligible to spend. This is the same as writing a check, but a lot easier. Debit cards are popular mostly due to the fact that consumers are spending money they know they have. It's the same as cash, except they don't have to take it out of the bank. It's convenient and easy. America encourages teens to get involved with credit. Once they turn eighteen the mail seems to be filled with applications and companies sending letters asking them to join. Television over and over again shows commercials for credit cards, so much that the slogans are imbedded in our minds. For example-MasterCard- there are some things money can't buy but for everything else there's MasterCard. Visa- it's everywhere you want to be. American Express- don't leave home without it. These slogans are heard constantly on television and its no wonder that credit cards spark an interest with teens. America wants people to spend money even if its money they don't have. It's our world today and our economy benefits from it. I decided to look into credit card debt at a student's perspective. I interviewed two female friends, one who unfortunately is in an extreme amount of debt and the other who has been responsible. I wanted to take a closer look into credit cards and how young adults really feel about them. Jeannette Mendez, a twenty-one year old college student at SUNY Albany states that she is in debt. "I owe money on my cell phone bill and Filenes. Not to mention my other credit cards." When asked how many cards she owned, Jeannette states, "I had a MasterCard and Visa and lots of store cards. I could never pass them up. I was told that I was going to save on my next purchase if I applied and that's all I needed to know." Jeannette is currently a full time student who is working hard to try and make ends meet. Jeannette attends school during the week and at night she waitresses. During her breaks from school, Jeannette works at a bank five days a week. "I have very little support from home, so the money I make goes straight to my bills. I still haven't figured out how to pay off my debts. It's a never ending battle for me." Jeannette agrees that she wasn't old enough to handle credit cards. She was never given proper direction on how to use one and she never thought of the reality of debt. "I'm a math major and I have a good head on my shoulders, but I just got in over my head. I just kept telling myself that I would pay it off next month. This of course never happened. I love shopping and when it came time to quit, I just couldn't. Now I have other responsibilities to worry about. I have rent and utility bills as well as my car payments." Jeannette is worried about her future credit; she assumes that she won't ever be eligible for any. "This is a really uncomfortable position to be in, I have no chance in getting a loan if I ever need one." Jeannette has learned from her mistakes and if she is ever able to own a credit card again she states that she will not misuse it. "Credit cards are comforting just to know that if an emergency ever came up I would be able to survive but I no longer have that option." Jessica, an eighteen-year-old student at the College of Saint Rose states that she has good credit. "I own one credit card, one debit card and I also have an Express store card." Jessica has been able to handle her money and her bills. "I always pay my bills in full, I have never paid the minimum. It makes me feel more comfortable, I think it's scary to know that if I don't pay in full the next bill will be double." Jessica likes to shop but she is responsible about it. "I always know how much money is in my bank account and I know what my limits are to spend. I also try to use my Debit card as much as possible. Therefore, I don't have to worry about the bills coming and all I have to do is balance my account. I usually just keep the credit card around for emergencies." Jessica states that she was a little skeptical of her first card. "I didn't use it for the longest time because I thought that I would spend too much and not pay it off. I have a lot of friends who are still afraid to get one. I knew that I was responsible enough not to spend money I don't have." Teenagers aren't always irresponsible and some can definitely handle credit cards. It is good to make teenagers understand the reality of them. Credit cards are convenient to have around but they can also cause serious problems. I don't think that we can blame teens; some just don't understand how serious the consequences are. If a young adult isn't provided with the knowledge before hand then it is inevitable that debt will happen. Credit cards are just another temptation in this world that we live in. Commercials and catchy slogans don't help either. It shows young adults that we live in a fantasy world where we can buy whatever we want with out facing consequences. Credit cards are right to put limits on their younger customers, so at least the limit will stop them. The bottom line is that young adults need to be better educated on this topic and encouraged not to spend money they don't have. Works Cited Feldman, Jessica, Personal Interview. 2 Dec. 2001. Mendez, Jeannette, Personal Interview. 2 Dec. 2001. Student Visa. Finances Credit Card Advice. December 1, 2001. Pages 1-3. Interview Questions: 1. When did you get your first credit card? 2. How many credit cards did you own? 3. Do you think you were old enough to get a credit card? 4. Did you max out your card early on? 5. Did you think that credit cards were similar to free money? 6. Are you in dept right now? What is it like to be in debt? 7. Do you think that having good credit is important? 8. Did you also sign up for store credit cards? How many do you have? 9. Do you think you will own a credit card again? If so will you be more responsible the next time around? The copyrights for all of the essays belong to their authors. No portions of these texts may be used without permission of the writers. Author: Laura Feinberg | |
| Category: Business Ideas | Added by: Antonio (15.06.2009) | |
| Views: 85 | Rating: 0.0/0 | |
| Total comments: 0 | |
