Friday, October 23, 2009

Financial Advice from a Fellow College Grad

CARDS ARE NOT EVIL The credit card bill that passed Congress this week makes it harder for college students to get a credit card. Ms. Nipp, however, wishes she had gotten one sooner. When she tried to get an apartment in San Antonio, the management company for her building told her that she hadn’t had credit long enough to sign the lease by herself.

“They wanted at least three years of history,” she said. “I wish I would have gotten a credit card earlier, since I really didn’t want my parents to have to co-sign the lease.”

This advice comes too late for recent college graduates who thought they were doing the right thing by steering clear of the plastic menace. But if they do not have their own credit cards yet, they should get at least one now to start establishing a good credit history. Without one, buying a house later could be more difficult and expensive.

BALANCE YOUR CHECKBOOK As a peer counselor in Texas Tech’s “Red to Black” financial assistance program, Ms. Nipp first worked with a client who needed help balancing her checkbook.

But why bother? Doesn’t most online banking software add up the numbers for you these days? Well, sure. But as Ms. Nipp pointed out, you need to keep track of what you are spending, in part, to make sure the bank got it right. “Or a check may not go through for a while, you may not remember that you spent it, and you might overdraw your account,” she said.

She does not speak from experience on this front. “My dad would kill me,” she said, noting that her parents are co-signers on her old bank accounts at home in Amarillo. And while she admits to neglecting the balancing chore herself, she keeps enough of a cushion in her account to avoid surprise overdrafts.

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