During a time when debt ceilings, deficits and financial downgrades are constantly talked about, it can become easy for anyone to fall victim to the alluring promises of plastic money.
After all, it can get you out of that bind between paychecks and allow you to eat something other than rice and pasta for the semester.
The problem arises when that new set of skis comes out on the market. You have wanted them for the whole year, so you slide your card, take the skis and have an epic winter on the slopes.
â€œThatâ€™s what people fall in to,â€ said Ryan Stephens, the district manager for all Wells Fargo banks in Larimer County.
Stephens warns these purchasing decisions can have long-lasting effects that may prevent you from getting that new car, house or even job. He said if you are not careful with your budget, you can quickly fall into this misconception.
â€œIt shouldnâ€™t be used as a form of income. It comes down to knowing you will have to pay for it eventually,â€ he said.
For some students, the promise of cash-back rewards, points and gifts entice them into spending more on their credit card than they are able to repay. But that can quickly put the balance above the limit, subjecting the user to steep fees and high interest rates.
From there, it can become difficult to keep the balance below the limit, piling on the interest and pushing you deeper into debt while damaging your credit score.
This will signal to future borrowers that you cannot pay back a loan in a timely and responsible manner â€“ a devastating impact that happens often during financially stressful times.
Jason Clark, a sophomore business major, got a credit card after graduating high school and soon ran into similar problems after his spending resulted in costly fees.
He learned the hard way to only use it for smaller purchases and emergencies.
â€œI got smart about it really fast,â€ he said. â€œYou have got to have a credit score at some point. Just know how to use it and be smart about it.â€
By establishing good credit early, students are ensuring an easier and potentially more successful application process for the big-ticket investments down the road, according to Stephens.
â€œHaving a credit history is critical, but there is no need to have more than one,â€ Stephens said. â€œFind one that works best for what you need it for, and stick with it.â€
Some students arenâ€™t so convinced â€“ at least not yet.
â€œHaving a card has never appealed to me,â€ said Abigail Flowers, a junior apparel design and production major. â€œI donâ€™t like to spend what I donâ€™t have.When itâ€™s gone, itâ€™s gone.â€
Flowers said she knows that she may need a card someday, but she has no plans of getting one any time soon.
Stephens explained even though many are wary of the offers in the mail, having a single card for emergencies or big-ticket debit purchases is a good plan. He stressed the importance of managing things in a responsible manner.
â€œPeople need to know there wont be a magic wand to wave it all away.â€
Senior Reporter Jason Pohl can be reached at firstname.lastname@example.org