Financial Literacy Resources

College students and credit cards: What YOU don’t know can hurt YOU

Before you even settle into your dorm room, chances are, credit card marketing teams will be on campus to sign up you up for credit cards. In fact, company representatives will compete for your business by handing out T-shirts, coffee mugs, CDs, and other enticements. Your best defense against this marketing blitz is to learn about the importance of using credit wisely.

If you think you can resist the temptation of a credit card, think again. A student age 18 or older, with no income, can get a credit card without a parent’s signature—and more than a handful do. According to Business Week, in 2000, 95% of all college students had credit cards.

Used responsibly, credit cards can be helpful in an emergency and for establishing a credit history. But you should talk to your parents about whether the card will be used for routine purchases or emergencies only and who will be responsible for paying the bill. Here are some tips.

Be aware of teaser rates. Credit card companies sometimes offer low introductory rates to attract new customers. These rates typically last for only a few months and then jump as high as 20%. Carefully compare offers from several different issuers before selecting a card.

Stick with one credit card. There is no reason you need more than one card. It’s easier to manage paying one bill at the end of the month, and using one credit card to pay off another is a dangerous practice that should be avoided.

Pay in full every month. It’s a good idea to get in the habit of paying the balance in full each month. You should avoid charging more than you can pay off at the end of the month.

Pay on time. Be sure to send the credit card payment several days in advance of the due date to allow for mailing time. Late penalties are costly and some companies will increase the interest rate after one or two payments are overdue.

Avoid cash advances. The interest rate on cash advances can be much higher than the rates charged on purchases.

Protect your credit history. As soon as you start using a card, the payments — whether paid on time, late or not at all — become part of your credit history. A poor credit history can affect your ability to rent an apartment, get a job, or buy a car or house. What’s more — the mark stays on a cardholder’s credit record even if the bill is paid later.

Don’t exceed the credit limit. This helps you avoid penalties and ensures that you will have credit available in the event of a true emergency. A $2,000 credit limit doesn’t mean you can afford to carry a $2,000 balance.

Review statements carefully. Immediately inform the credit card company of any discrepancies or errors on the monthly statement.

Report a lost or stolen card immediately. Keep a copy of your credit card account number and the financial institution’s name and customer service telephone number in a convenient place. It is important to call the credit card company immediately if the card is lost or stolen.

Protect personal information. You should never give out your credit card number unless making a telephone, mail order, or online purchase. Do not let anyone else use your credit card and do not charge purchases for other people.

FICO Scores

FICO Credit Score – Range
The FICO credit score range is between 850 and 300. I’ve rarely seen those two frontiers in real life. … 850 means you can get a loan to buy entire Tiffany store in Manhattan. 300 …, well your credit is bad to the point you can’t get any. I am kidding of course in both cases. Even the highest FICO credit score doesn’t guarantee that you get what you want and the worst one may not prevent you from getting at least some sort of loan. See important update on FICO range.

Good FICO Score
FICO score of 700 and higher means Excellent or Very Good credit. Certain lenders offer better rates and/or discounts if you are over 720, 740, etc. Pity, their greedy loan officers might never share them with you.

FICO score from 680 to 699 means Good. Pretty much you can get a normal loan. Translating in layman terms you won’t be robbed too bad.

FICO score from 620 to 679 is OK. You won’t be denied but the terms are not going to be too generous. Still you are officially a nice person. But you better check the increase credit score page.

Low FICO Score
FICO score from 580 to 619 … . Banks, brokers love you. Want to know why? That is where bad credit starts. But it is not that bad yet. They are still able to get you a loan but on their terms. Fat commissions for them, much more expensive loan for you. Chances are you will take it since you have little choice. And you’ll think they your best friends. See improve my credit score page.

Bad FICO Score
FICO score from 500 to 580 is where the real trouble starts. Your credit is bad, period. You’ll get your loan and you won’t like it. But you should take it anyway, because that could be the beginning of your fresh start. Way to get away from bad credit. See repair your credit rating for more information.

FICO score of 499 and below … . My friend, you are in serious need for help for bad credit. There is very little what can be done and while it is still possible, the terms are going to be simply too brutal. The best thing is to try to repair bad credit first – the FICO credit score can be improved!

Identity Theft

Victim Statistics

Approximately 15 million United States residents have their identities used fraudulently each year with financial losses totaling upwards of $50 billion.*  

On a case-by-case basis, that means approximately 7% of all adults have their identities misused with each instance resulting in approximately $3,500 in losses. 

Close to 100 million additional Americans have their personal identifying information placed at risk of identity theft each year when records maintained in government and corporate databases are lost or stolen.

These alarming statistics demonstrate identity theft may be the most frequent, costly and pervasive crime in the United States.  

The sophistication level of professional identity thieves involved in organized crime continues to grow along with the methods they develop. From individually tailored phishing and vishing scams, to increasingly successful hacks of corporate and government databases, to elaborate networks of botnets designed to hijack millions of computers without any trace, there is an ever-increasing threat to all Americans.

At the same time, basic methods of identity theft continue unabated.  From stealing wallets and purses, to dumpster diving and stealing mail, to the use of pretext and social engineering to deceive customer call centers into releasing personal account information, the original methods of identity theft still work.

As the methods used to perform identity theft expand, so do the types of accounts and services being stolen by identity thieves. Credit, debit, checking and saving accounts are no longer the only targets.  Identity fraud has grown to include theft of cell and landline phone service; cable and satellite television service; power, water, gas and electric service; Internet payment service; medical insurance; home mortgages and rental housing; automobile, boat and other forms of financing and loans; and, government benefits.  Identity thieves will also use stolen identities to obtain employment and to deceive police when arrested.

Quite simply, every individual or business is vulnerable to attack when it comes to personal or corporate information, products and services.

*Based on a range of information gathered from public and private resources.