Topic: Consumer Law
Many of us received our first credit cards before the age of twenty. Credit-card companies often target college-age students, setting up on campus during various events and making getting credit as easy as signing on the dotted line. Department stores may sometimes also offer credit that is easier to attain—and then there are other options too like secured credit cards and those available with co-signers (often parents).
Younger Cardholders Should Be Educated on the Pitfalls
Many experts see this as the perfect time for college-age kids to begin learning how to handle their finances, to include credit. But younger cardholders may not realize that the tone of their future credit history is being set with that first one or two credit lines. Hopefully, this has a positive outcome for most—but many 18-year-olds don’t yet have the knowledge, experience, or discipline to hold off on buying items they don’t need. This can result in debt that they have a hard time paying off, and if the financial situation escalates, it may even end up in bankruptcy—which is not an uncommon as you might think in the under-30 crowd.
Students May Receive Many Offers for Credit Cards
You can guide your older child by encouraging them not to take on more credit than they can handle. If they have just entered college, they may be barraged by offers. Just because they are being offered multiple lines of credit does not mean they will have the means to pay for them—and especially if they are busy working (hopefully) and attending school at the same time. If your older children, just entering the ‘real world,’ are not educated on the pitfalls of credit-card debt, they could easily graduate with a well-earned diploma and thousands of dollars in credit card debt!
Student Loans May Exacerbate Debt Problems
Students just entering college often have just begun accumulating student loan debt as well. This is a crucial time for young borrowers to get counseling from financial aid officers regarding all grants and scholarships available. If they can participate in programs which offer free aid, that should be examined first, as these funds don’t have to be paid back. If financial coverage is still needed to pay tuition, federal student loans are usually a better bet over private, offering less expense and greater flexibility over time.
Contact Us with Questions About Your Debt
If credit cards or student loan debt are currently a challenge, contact Fitzgerald & Campbell, APLC, a law firm with decades of experience in helping clients to explore their financial options. Let us review your case and help you decide the best route. We are here to help you.