Some advice from banking professionals
From the American Bankers Association:
• Talk to your credit card issuer if you have questions. The credit card business is very competitive, making customer service a top priority.
• Order a copy of your free credit report annually. Your credit report evaluates your performance as a borrower and needs to be accurate. To obtain a free copy from the Federal Trade Commission, visit www.annualcreditreport.com.
• Go to your local bank or call your credit card issuer if you are having trouble repaying a loan. Often they can work with you to establish a manageable payment plan.
• Evaluate varying credit card offers. Choose the card that offers the right features for you.
• Take time to shred important documents, including medical records, financial records and credit card offers. Identity thieves can use the information on those documents to open credit in your name.
• Save for emergencies. Experts recommend having three months of salary in reserve, but as little as $500 will help cover common emergencies instead of depending on credit cards.
• Make sure you pay your credit card bill on time each month. Avoid making only the minimum payment.
• Access your account online to monitor and compare charges with receipts. Regular review of your accounts helps protect you from unauthorized charges.
• Read your credit card agreement carefully. Understand what your finance charge and annual percentage rate are and when your grace period expires.
It’s easy to get lost in the world of personal finance, especially for teenagers nearing the end of their high school careers.
That’s why, as part of the seventh annual Get Smart About Credit program, founded by the American Bankers Association’s Education Foundation, Douglas County Bank officials are getting out to local high schools to help ensure students keep their credit score high.
“We’re hoping through education and talking about credit and credit histories that we can make them smarter consumers,” said Michelle Jennings, Douglas County Bank loan officer.
Lawrence High consumer math teacher Paul Bohlen has heard plenty of stories from students who didn’t fully comprehend the implications of opening a credit card.
“(They) went out and spent the max on a credit card and then got a bill. They came to me and said, ‘I don’t get it. I have a $5,000 bill. Why?’” Bohlen said. “They thought it was a $5,000 gift, not a $5,000 loan.”
High school and college students can ruin their credit by overspending and not being able to pay the bills. It can make it that much harder to purchase adult essentials.
“If you don’t know anything about (credit), then you’re going to mess up your credit and you won’t ... be able to buy a car and to be able to buy a house,” senior Sarah Hutchison said.
Hutchison has a debit card, but has a few friends with credit cards. While she said she’ll probably get one in college, in high school, a couple thousand dollar limit could be trouble.
“I think it’s pretty dangerous,” Hutchison said. “You can spend as much as you want and your parents are going to pay for it. I don’t want to have bad credit when I’m older.”
Jennings said it used to be common for parents to provide credit cards for their children heading off to college. But the suffering economy usually means there’s not as much money to go around — and both parents and their children need to be smart spenders.
“Their (student’s) most important concern ... is not taking care of their parents’ money,” Jennings said. “Hopefully, parents are being wiser about it, kids (are) being more aware of things that are going on right now.”
There are a few things to remember if there is a credit card on hand, ready to swipe.
“If you are going to get a credit card, which is something to have as an emergency situation, use it for an emergency situation,” Jennings said. “If you’re going to use it, be sure you pay it off every month.”