Graduates: Keep Good Credit

By: Elizabeth Donatelli
By: Elizabeth Donatelli

May 18, 2005

Can't afford that skirt today or don't have the cash for lunch? No problem, just swipe it.

"I never have cash, which is bad, but I try not to use my credit card," said Sarah Allen, who is graduating from the English graduate program at the University of Virginia.

The young generation is growing up in a time of instant satisfaction. In fact, 70 percent of parents say kids expect to have what they want, when they want it, shows a survey by Northwestern Mutual, which is why credit cards cause so much trouble.

"With my parents money I never keep track of that, which is an issue. I kind of remember, 'oh I got that shirt and those pants, that was around 60 dollars,' you know, things like that, but it's not the best system," said undergraduate student Laura Layman.

But what happens to graduates when they are completely on their own? Nellie Mae estimates over $3,000 as the average credit card balance of final year undergraduate students and almost double for graduate students. Setting a budget can prevent or help you get out of debt.

"On a very detailed basis, write out all of your bills or debts and every penny should really be allocated. You need to have a set budget for discretionary expenses and a set budget for savings," said Pamela Turner of the University of Virginia Community Credit Union.

Using credit cards wisely can manage cash flow if done correctly.

"Start off keeping track of your credit card purchases and not charge anything that you aren't prepared to pay at the end of the month when you get that bill," Turner said.

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