2008 Woodie Awards
Revolving credit gives card holders the run around
Christina Piazza
Issue date: 4/3/08 Section: News
Did you know that your credit card company can lead you into excess debt?
"The Federal Reserve says Americans have accumulated nearly $1 trillion, a record amount, in what it calls 'revolving credit,'[credit cards]" said the New York Times.
College students contribute to this statistic as well.
"Three-fourths of undergraduate students had credit cards in 2004, with an average outstanding balance of $2,169, according to a study by the student loan company Nellie Mae. Nearly nine in 10 graduate students had at least one card in 2006, with an average outstanding balance of $8,612," said the Web site infozine.com.
This contributes to the decline in the economy, which the market is experiencing.
"I think that credit cards are very tempting, especially when you first begin using them," said junior Nick Edwards. "They make you want to spend, since you're not using actual cash, but unless you can pay off your balance every month it ends up costing you more because of interest."
It isn't just the credit card holders who are to blame for all this debt?
Card holders need to watch out for certain mistakes that may occur within card companies. Credit card companies sometimes fail to notify holders of rate increases, which forces holders into debt unknowlingly.
There's the possibility that a credit card company could fail to notify a card holder of a change in the monthly due date, which would result in an unjust late fee.
"I was just used to having a certain number of days [to pay the balance], then all of a sudden it changed and I was late," said a card holder to Newsweek. "It's this gotcha game where the [card issuer] keeps changing terms and sort of trying to catch you in a mistake, so that one month you pay in 14 days, the next month it's 10 days, and then you might be late because you didn't realize it."
A bill has been proposed by Rep. Carolyn B. Maloney, chairwoman of the House Financial Institutions and Consumer Credit Subcommittee, said Newsweek.
"The Federal Reserve says Americans have accumulated nearly $1 trillion, a record amount, in what it calls 'revolving credit,'[credit cards]" said the New York Times.
College students contribute to this statistic as well.
"Three-fourths of undergraduate students had credit cards in 2004, with an average outstanding balance of $2,169, according to a study by the student loan company Nellie Mae. Nearly nine in 10 graduate students had at least one card in 2006, with an average outstanding balance of $8,612," said the Web site infozine.com.
This contributes to the decline in the economy, which the market is experiencing.
"I think that credit cards are very tempting, especially when you first begin using them," said junior Nick Edwards. "They make you want to spend, since you're not using actual cash, but unless you can pay off your balance every month it ends up costing you more because of interest."
It isn't just the credit card holders who are to blame for all this debt?
Card holders need to watch out for certain mistakes that may occur within card companies. Credit card companies sometimes fail to notify holders of rate increases, which forces holders into debt unknowlingly.
There's the possibility that a credit card company could fail to notify a card holder of a change in the monthly due date, which would result in an unjust late fee.
"I was just used to having a certain number of days [to pay the balance], then all of a sudden it changed and I was late," said a card holder to Newsweek. "It's this gotcha game where the [card issuer] keeps changing terms and sort of trying to catch you in a mistake, so that one month you pay in 14 days, the next month it's 10 days, and then you might be late because you didn't realize it."
A bill has been proposed by Rep. Carolyn B. Maloney, chairwoman of the House Financial Institutions and Consumer Credit Subcommittee, said Newsweek.
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