Prac­tic­ing Safe Credit: Con­sid­er­a­tions Be­fore Get­ting a Credit Card

Let’s be honest, are we really thinking about Fair Isaac Corporation scores right now? It’s safe to say that it’s more than likely not crossing our minds as much as getting our degrees. The closest thing to credit scores we’ve come across is probably creditkarma.com. Because of the lack of knowledge college students have about this subject, they’ve easily become the top target for credit card companies. 

Hav­ing a credit card is­n’t a neg­a­tive thing, how­ever, it can be dan­ger­ous if you don’t un­der­stand what you’re get­ting your­self into. Ac­cord­ing to Di­rec­tor of Fi­nan­cial Aid Martha Har­baugh, col­lege stu­dents are tar­geted be­cause they’re the fu­ture gen­er­a­tion. Com­pa­nies see stu­dents in the process of get­ting our de­grees and their pupils turn into dol­lar signs. Har­baugh feels it au­to­mat­i­cally tells them that we’re go­ing to earn a mil­lion dol­lars more than some­one who is­n’t in col­lege. It makes col­lege stu­dents ap­pear to be a valu­able tar­get.

The com­pa­nies say, “Let’s get them tied down, let’s get some cus­tomer loy­alty go­ing,” Har­baugh said.

It may sound off, but be­ing a tar­get is­n’t as ter­ri­ble as it sounds. Ac­cord­ing to Har­baugh, it sim­ply means that in a sea full of el­i­gi­ble cus­tomers, com­pa­nies say, “Here’s the one, that if we’re go­ing spend time and en­ergy on, here’s the one that of­fers us the most ad­van­ta­geous re­turn of in­vest­ment.”

One of the main mis­takes stu­dents make when it comes to credit is sim­ply be­liev­ing it comes at no cost. This is­n’t the case at all. Har­baugh said, “it does­n’t mean it’s free just be­cause you did­n’t have to take cash out of your pocket to pay for it.” Credit cards are in­stan­ta­neous. You see some­thing and it’s yours. The in­stant ful­fill­ment stu­dents get makes it seem like it’s so sim­ple that they don’t even bother tak­ing a step back to re­al­ize the cost of what they’ve signed up for.

One of the ma­jor mis­takes, Greg Moore, ac­count ma­jor,  feels stu­dents makes with credit is mak­ing un­nec­es­sary pur­chases. The prob­lems don’t arise at the time of the pur­chase. The prob­lem comes in when you make these pur­chases and can’t pay them off. Moore has a credit card of his own. He says he uses them for food, gas and emer­gen­cies. “It’s not that hard to pay it off,” Moore said. He makes sure he sets part of every pay­check aside each month to pay his credit card bill.

Harbaugh discussed that if you’re using a credit card and you spend $500 at the end of the month, there are two choices. The first is that you’ve actually spent $500, so that’s a deal. The second is that you haven’t spend $500, and you don’t have the money to pay it back. Now the second possibility is where you find yourself in a sticky situation, and it’s hard to get unstuck once you’ve gotten there. 

Har­baugh ad­vises, “Con­sumers be­ware, you have to be care­ful.”

Your credit can come back to haunt you.

Even if it’s from years ago, once your in­for­ma­tion hits the scene, it’s out there for every­one to see. And if com­pa­nies dig deep enough, they can cer­tainly find you. Ac­cord­ing to Har­baugh, there’s a dif­fer­ence be­tween your FICO score fluc­tu­at­ing and sim­ply hav­ing bad credit. Some­times your FICO will have its ups and downs- that’s nor­mal. Com­pa­nies might see this and be more le­nient when it comes to giv­ing you a loan. How­ever, if you just have bad credit over­all, they’re not weigh­ing whether the odds will be in their fa­vor. The can­nons are sound­ing off, you’re out of here.

Of course with time you can re­cover, but the ques­tion of why your credit was bad or why you went bank­rupt will al­ways linger in the air. “It’s like that ‘F’ on your tran­script,” said Har­baugh. Even if you had all A’s every other year, you’ll still have to ex­plain that you just could­n’t grasp the con­cept of what os­mo­sis was.

The good news is that you can avoid all of this. You just have to keep your head in the game. Ac­cord­ing to Har­baugh it’s very sim­ple. You have to be con­scious of your bills, main­tain a bud­get, min­i­mize the amount you need to bor­row and try not to add too many un­nec­es­sary ex­penses.

It also helps if you pause and ask your­self, “Why am I get­ting a credit card?” Un­der­stand­ing the an­swer to this ques­tion puts the pur­pose of your credit card into per­spec­tive. If you’re get­ting it for con­ve­nience or to es­tab­lish credit, those are both spec­tac­u­lar rea­sons, ac­cord­ing to Har­baugh. On the other hand, if you’re more of a “to see is to want” type of per­son, the credit card life may not be for you.

The other thing to be weary of is iden­tity theft and credit card theft. Peo­ple across the world are scan­ning try­ing to pick up as much in­for­ma­tion as they can on you. There’s only one you, so pro­tect your­self at all costs. Leave no doors open for some­one to come in and have your credit ru­ined. To avoid this, Har­baugh ad­vised not to be cav­a­lier, change your pass­words of­ten, don’t let an ac­count go dor­mant and don’t trust your in­for­ma­tion with any­one.

Harbaugh’s theory is that “If you don’t spend any time with maintaining your credit, then you’re afraid of it, and if you’re afraid of it, that means it’s controlling you, you’re not controlling it,” So at the end of the day, be comfortable with where you are financially, and pay attention to your money coming in and going out.