Common Sen$e: Don’t Trade Good Credit for a Free T-Shirt

Art Wood

If you went to college, you know the endless credit card offers that you receive in the mail on a daily basis. They all sound so attractive. Get a free T-shirt! Get $50 in bill credit! No payment for 60 days! The deals go on and on. This may be the first time many young adults are faced with the kinds of financial decisions that are potentially also life-altering, and they are often ill-equipped to make the right decisions.

I have spoken a lot about credit in my column here. In my line of work, I see all the nightmares that poor credit decisions create. If you can avoid early financial missteps, you will have a leg up when you go to buy your first car or house.

My first suggestion to students is to just throw all those credit card solicitations away - plain and simple advice. I know those offers are like the new “shiny object,” and they make them feel all grown-up, but they should find another way to feel more mature. Credit cards, and debt in general, are not to be messed with. Let them ask any adult about the weight of paying off their debt. It is like a ton of bricks.

My second suggestion comes straight from my Dad! If they do indeed open a credit card, listen to his words. “If you can’t pay cash for it, then don’t buy it.” Notice he didn’t say NOT to buy stuff on a credit card, just don’t leverage yourself and put money on credit cards. Sometimes credit cards can be super convenient. I use them all the time, but I pay my balance off every month, even when it hurts. One of the reasons I do this is because I hate to pay interest, and credit card interest is the worst. Banks try to lure you in with low up-front or promotional interest rates, but then at the end of the promotional period, raise the interest rates to often over 20%. If you carry over a balance from the promotional period, you never seem to make a dent in it, but end up paying the interest and never the balance.

My last suggestion is to set your payments on auto draft so you never miss a payment. Racking up credit card debt is bad enough, but you are toast if you miss payments. I learned the hard way about this. I am not organized and would often procrastinate until I missed a payment, and then have to suffer the consequences of penalties, increased balances and negative credit reports. When you set up auto draft, you have the choice to auto draft the full balance or the minimum payment. Per the last paragraph, you know what I recommend, but if you decide NOT to do that, please set it up to at least pay the minimum payment so you are never late or get behind on payments.

Another one of Dad’s favorite sayings was, “Always come from a position of strength.” College is the start of a student’s financial journey and these decisions will help shape their life for years to come. If they can abide by these simple steps, they will be coming at life from a position of strength! Art Wood (NMLS #118234) is the branch manager of The Art Wood Mortgage Team of Goldwater Bank, located at 2341 Main Street in downtown Tucker. “Tucker’s Mortgage Guy” for fifteen years, he is a former Tucker Tiger (Class of ’92), and co-founder and organizer of Taste of Tucker. Family guy, community guy, and definitely not your typical mortgage guy - it’s all that he does that makes Art Wood who he is. Contact him at 678.534.5834 or art. wood@goldwaterbank.com