Rhe Dangers of Credit Cards
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- Hey Joe! Guess what I just got on my frist day at college? A new credit card! with my name on it!
- No way! I got a great 0% Introductory APR which means I don't have to pay interest! It's like free money! It doesn't even come out of my bank account!
- Oh man Ulric! You need to be careful of those!; You can drown in debt if you're not careful!
- It was so easy though. This nice lady asked if I wanted one and said all she had to do was run my credit report.
- No way! Let me introduce you so you can see how great this is! It's like having free money whenever I need it!
- Oh man! That's how they get you! It starts at 0% but then it will get up to 19%-22% before you know it
- hi katie. This is my buddy Joe and I was just telling him about this great 0% credit cart you got for me! Can you tell him about it? I think he should get one too
- Wait a minute. If I don't have a job how am I going to make my monthly payment? Are there any fees if I can't pay?
- Sure Ulric.#160; zhi zjoe.#160; You can easily get a 0% introductory APR credit card from my bank since you are a student.#160; You don't even need to have a job to qualify.#160; Just fill this out!
- I don't remember her telling me that earlier!
- Great question. You do have to make a minimum payment every month. If you forget there is a $29 fee and yout APR goes up to 29.99%
- So just to clarify, this isn't like having free money. There can be fees attached. Can I charge as much as I want whenever I want?
- No, you will have a credit limit
- Can I borrow money from my card to help me make my payments?
- Oh boy - even more debt!
- So Katie, I just want to review what you told me about getting a credit card. A credit card is a debt since it is borrowed money. There are limi=ts on how much I can spend and fees if I go over of forget to make my monthly payment. There is an interest rate where I pay the bank moey for letting me borrow their money. And if I don't make my payments I am not trustworthy and that will be reported on my credit report. Now Ulrich, how will you make your payments if you don't have a job?
- That would be called a cash advance and those have higher interest rates, and sometines fees attached for the convienece of bowwoing cash directly from the ATM
- I agree with Joe. I think I'll cancel mine right now until I get a job. I don't want to risk drowning in debt and lowering my credit score
- Phew! That was close!
- Well Katie. Thank you for all of that infofmation. I am going to pass on getting a credit card. I'm only 18 and I don't want to begin my adulthood in debt.
- OK. Here's my card if you change your mind in the future
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