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Tuesday, May 10, 2011
Credit 101 for Graduates
CCCS of Greater Dallas offers Helpful tips for managing expenses and the temptation of credit
PR Support for CCCS Dallas
Dallas - May 10, 2011 - The National Center for Education Statistics projected 2.8 million public high school seniors and 298,000 private high school seniors will graduate this spring. Whether enrolling in college or entering the "real world," Consumer Credit Counseling Service of Greater Dallas (CCCS of Greater Dallas) wants to make sure graduates are prepared for the basics of credit and budgeting.
Set up a budget. Be aware of how much money is in your checking and/or savings account(s), as well as how much you're obligated to pay when the credit card bill arrives. Also, prioritize your spending. Housing, utilities and food should come first. Make a list and decide what needs to be paid off first. A good way to keep track of spending is to record all purchases in your checkbook as though you've written a check, deducting the amount of each purchase. When the money is gone, it's time to stop charging. So, even if a designer handbag or the latest tech gadget seems like a good idea at the time, they're not.
"Because most graduates enter their first job or freshman year of college without strong financial literacy or experience, the first year after high school can be a financially unstable period for young adults," said Todd Mark, vice president of education for CCCS of Greater Dallas. "Students are forced to manage their finances on their own for the first time - whether it's budgeting money from mom and dad so it lasts or working to cover their expenses. And, unfortunately, many of these graduates end up in debt due to overspending or the lack of a financial plan."
Consumer Credit Counseling Service of Greater Dallas (CCCS of Greater Dallas) suggests students use the following tips to prepare for a successful financial future.
Use debit cards or cash whenever possible. Avoid spending money that is not readily available and accessible. This is why cash is great. You know exactly how much you have to spend. If you use a debit card, make sure to record all debit charges to avoid overdraft fees. Debit cards are great if you keep track of how much is in your account. Prepaid cards are also a good way to control your spending. Keep track of expiration dates and limitations on these cards to avoid any surprises.
Shop around for the best card. Remember, if you are under 21, you need a co-signer or proof of income to qualify for a credit card under the CARD Act. Establishing good credit means choosing a card that is right for you. Not all credit cards are the same. Don't select a credit card on a whim, or simply because the lender is giving away a free gift when you open an account. Research which one is best for your financial circumstances, spending habits and paying ability. Six things to investigate when shopping for a credit card include the APR (annual percentage rate), annual fee, grace period, penalty fees, balance calculation method, and reward programs and associated costs.
Be aware of risks of credit fraud. Know that identity theft and credit card fraud are serious issues, but there are ways to protect yourself. Never let someone else borrow your credit card. Do not leave your card or receipts lying around for anyone to see. Also, never give out your credit number unless you know it is a legitimate company or organization. When in doubt, don't give it out.
Take advantage of your student resources. Don't spend money on food when you have a cafeteria readily available to you. Research meal plans offered by the college and check out prices at the cafeteria; they may be a lot cheaper than a meal from a fast food restaurant. It might not be offering the meal you want, but that's another charge you won't have to make. Also, take advantage of any discounts you may get for showing your student ID at businesses or venues you frequent. Research your books online first and see if you can get better pricing options than the campus bookstore, but don't forget about shipping fees. Remember that old books are just as good as new ones, and are often cheaper. Plus, students that have used the books before you may have written helpful notes in the margins.
Establishing and maintaining good credit is very important. How you handle credit today will affect your access to credit later. Banks, prospective employers, credit card companies, most utility companies and property management companies run credit reports when you apply for a credit card or loan, apply for a job, purchase a home or a car, rent an apartment or sign up for utilities. Paying bills on time is a great start to establishing good credit.
Know what's on your credit report. All Americans are entitled to a free copy of their three credit reports every 12 months. These can be ordered at www.annualcreditreport.com or by calling 1-877-322-8228. Don't start out on the wrong foot; now is the time to become aware so you don't have any surprises when you go to buy your first house or car.
For more information on budget or credit education and counseling for young adults ages 18-26, or one of our free classes or www.cccs.net/webinars, contact CCCS of Greater Dallas at 800-249-2227 or visit www.cccs.net.
About CCCS of Greater Dallas
Consumer Credit Counseling Service of Greater Dallas, Inc. is a nonprofit, community based credit counseling and debt management service. Established in 1974, CCCS of Greater Dallas and its affiliate offices provide financial education and counseling to consumers in-person, by phone, or Internet at more than 20 locations in four states. CCCS of Greater Dallas is a HUD-approved housing counseling multi-state organization and serves as one of seven counseling agencies supporting the 888-995-HOPE Hotline. The agency is also a member of the National Foundation for Credit Counseling (NFCC), the nation's largest and longest serving national non-profit credit counseling network. To learn more about CCCS of Greater Dallas' free seminars or the agency's services, visit www.cccs.net or become a fan of CCCS of Greater Dallas on Facebook to receive updates on agency events and offerings.