Vultures

Photo courtesy: Geoff Coe

Now that my daughter has been inducted into the exclusive college mass mailings club one of the other unpleasant effects has made itself known: the mass mailings for credit card offers aimed at college students. Nearly every person I know that has bad credit debt does so because back when they were in college themselves, they suddenly had at their fingertips no less than a dozen credit cards with varying limits even though they had never been asked to verify or confirm any income. I remember the applications: "Income?" Fill in the blank, then "Sign here to confirm all of the above is true." That was basically it. Within a couple weeks you were shopping for things you certainly didn't need.

Even though the president and Congress put some new rules on credit card companies, apparently those rules don't affect solicitation. The latest card offer she received was for a card with a 25% interest rate and a $2000 limit. We sat down with all her recent offers and with a credit card payoff calculator I showed her what a $2000 limit with a 25% rate really meant: with payments of say, $50 a month, it would take her 85 months to pay off. In other words, a total of $4250. It was an eye opener and one of the best lessons she'll get when it comes to money.

We then turned around and showed her the other side - the reward of having good credit and how important it is to research and find a reputable, low-interest credit card with a small limit. This plan involves her making small purchases and paying them off immediately or even over a couple payments to start building her own credit file. It's amazing how many things require good credit: everything from renting apartments and homes to phone bills to car insurance and lately I hear - doctors' offices are checking too. Hopefully she'll keep taking the offers she gets, reading the fine print, and tossing the 99% of them that will do nothing but hurt her in the long run.