Area banks offer students
variety of financial options
By Luis Jiménez
Summer
Reporter
Incoming freshmen are offered many options when
it comes to choosing their bank in West Lafayette; however, careless
management of one's credit could have serious implications, an expert
says.
The are several banks in the Greater Lafayette
area such as Bank One of Indiana, Union Planters Bank, Lafayette Bank
and Trust and Bright National Bank. Credit unions include the Purdue
Employees Federal Credit Union (PEFCU), the Industrial Credit Union
and the Tippecanoe Federal Credit Union.
Whichever bank you choose, you should first shop
around, advised Flora Williams, a professor of family economics and
financial counseling. She said students should compare at least three
banks or credit unions to find the one that best suits their needs.
She said these institutions offer many services,
but of all the services, credit card accounts are the ones students
should be most cautious and responsible with. She said having one credit
card may be convenient and useful in case of an emergency, but having
several cards to have extra spending money could ultimately lead to
ruining one's credit history.
The problem starts, she said, when students start
paying for expensive entertainment, restaurants, long-distance charges
and fancy clothes with their credit cards. She said this leads to a
spending pattern she calls "creeping indebtedness."
Creeping indebtedness occurs when people are not
aware of what's happening with their financial status, so they spend
until they are "knee-deep" in debt, Williams said.
"This pattern could lead to disaster," Williams
said. "(Students) end up paying thousands for what they owed initially."
According to Williams, excessive debt came in first
place, when a survey was conducted among college dropouts about their
reason for academic failure. "More students drop out because of debt
than for academic reasons," she said.
Another study, she said, revealed that 25 percent
of college students have financial concerns about credit debt that keeps
them from concentrating properly in academics.
She said students are often too susceptible to
credit card offers because they want to live an "ideal college experience."
She listed a few suggestions students can take
to stay out of debt problems.
Students need only one credit card.
Pay as much as you can afford. Paying the minimum
we'll almost never eliminate debt, Williams said.
Credit card companies' offers are very enticing,
but you don't have to take them all.
Shop around. Compare services and interest rates.
Keep a good credit record. This is extremely useful
when soliciting a mortgage, renting an apartment, purchasing insurance
or even getting a job.
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