Debt lurks a swipe away

Commotion from credit card company representatives bombarding students is a familiar scene at GW. Recruiters frequently offer students incentives such as T-shirts and water bottles for simply applying for a new card. On company Web sites, major credit card corporations frequently offer students discounts at online retailers to join their legions of cardholders. For many students, getting a credit card carries many tough lessons in personal finance.

Sophomore Claudia Davila received her first credit card as a birthday present her sophomore year of high school. She said she used the card responsibly in high school but when she got to GW that all changed.

It started during freshman year, when I lived away from home for the first time, Davila said. I got carried away with clothes and accessories.

Davila said her largest purchase was a $500 jacket, but after learning her lesson she has not used her card in about a month.

I realized that I’d spent over a thousand dollars in the previous two months, she said. The bulk of which was spent on clothing.

The criteria for student credit card approval seems fairly simple. The online application for the Discover Card asks applicants for their employment status, annual income and whether or not they have a checking or savings account. Numerous Web sites offer students opportunities to submit multiple credit card applications for different companies along with tips for maintaining good credit. The advice includes basic suggestions such as timely bill payment and spending only what can be paid. The official site for MasterCard also offers students tips on money management and an opportunity to establish an online budget worksheet.

The main steps to maintaining a problem-free account include avoiding unnecessary purchases and paying bills promptly. Freshman Delaina Price said she has not had any difficulties managing the card she got the summer before coming to GW.

I only use it for necessary purchases, Price said. For the most part, that refers to school-related items.

Freshman Dohini Patel, who is awaiting the arrival of her first credit card, said she does not anticipate any overspending.

It was a security issue, Patel said. My parents want me to have it in case of an emergency.

Sophomore Raj Parekh chooses to use a debit card. Debit cards work like credit cards and offer an ATM service.

I think a debit card is a more effective way of purchasing goods and services, Parekh said. There’s less liability, which is great if you’re irresponsible. It’s also helpful when you’re in cash-only situations, since it allows you to have tangible currency at any time.

Parekh also said he thinks debit cards are more secure than credit cards.

In most stores, the machine reading the debit card asks for your PIN number, he said. With a credit card, you can just forge someone’s signature without needing to know any other information.

With the holiday season approaching, credit card spending will reach a record high. Credit and debit cards are a great way to pay in advance for holiday gift items, but the season is also the most common time for people to get themselves into credit card debt.

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