Credit cards: Plastic, powerful and puzzling.
"I would not recommend one unless you absolutely need to haveit," said sophomore Whitney DeBruler. She owns four creditcards.
Associate professor of finance and insurance Srinivasan Sundaramsaid the university should train students how to properly use theircredit cards.
"A college student has to establish credit because the day theygraduate and look for a job, there are huge investments to bemade," Sundaram said.
Sundaram said it's important for students to establish creditfor the costly items they will buy after college, including a car,a home or a loan.
DeBruler obtained her first card at age 18 for this veryreason.
To keep students aware of credit cards and other finances,Sundaram is hoping to include a finance class in the university'score curriculum. The class would be similar to Finance 110, whichteaches students how to manage credit, personal finances and betterunderstand the monetary system.
"The idea that you can live now and pay later is what getseveryone into trouble," Sundaram said. "There's no point carryingon debt from years at the university to the day when you startearning money when you already have to start paying off loans. Itjust gets expensive."
Some cards will give students teaser interest rates of about 5percent, which last about six months. After the time is up, therate could jump to 19 percent, Sundaram said.
"The interest is what kills you," DeBruler said.
DeBruler said she always makes her payments on time and tries topay more than the minimum amount.
DeBruler said she was lured to get a store credit card becauseof the deals that came with them, such as a percentage discount atthe mall.
Store credit cards, unlike standard credit cards, can only beused at the store. Retailers such as Meijer and Wal-Mart offer suchcards.
"There is such great competition in the (credit card) industry,"said Patrick Barkey, director of economic and policy studies atBall State.
Barkey said companies get ahead of the competition by offeringbenefits, such as frequent-flyer miles.
Visa has five cards with more than a dozen benefits each. Thebenefits range from dining privileges to guaranteed airport parkingto travel-accident insurance.
With all the options and features, students may feel a littleoverwhelmed.
Sundaram said the best place to look for the ideal card is wherea relationship already exists -- a bank.
Cindi Bradley, a branch manager at Bank One, said people canobtain credit cards through the Bank One, even if they do not bankthere. People of all ages and credit histories come in, shesaid.
DeBruler does not trust her lendership and usually leaves hercards at home.
No one need worry, however, about the legitimacy of a card. In1998, Congress passed the Fair Credit and Charge Card DisclosureAct. It requires credit and charge card issuers to present theirinformation clearly so everyone can understand and find the bestdeal.
Barkey suggested students research their options when lookingfor a card.
Credit Card issuers are required to tell you the followinginformation or tell you where you can find it:
This list was comprised by the Federal Reserve Bank of SanFrancisco (www.frbsf.org).
* The annual percentage rate for purchases made on credit(credit cards
only).
* How the APR is determined if it is a variable rate (creditcards only).
* The method the issuer uses to compute the balance forpurchases against which the finance charge is imposed. Calculatingan average daily balance or using the outstanding balance at thebeginning of the billing cycle are examples of these methods(credit cards only).
* The amount of any minimum finance charge (credit cardsonly).
* Any transaction fee for purchases, whether a specificdollar amount or
percentage fee.
* Transaction fees for cash advances and fees for paying lateor exceeding the credit limit.
* The amount of any type of annual fee that you will becharged.
* When charges made to a charge card are due andpayable.
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