Set yourself up for success! Read up on what students need to know about credit cards.
Christine and her mom go over how to properly use a credit card and her mom tells her a story about how she was irresponsible when she was a kid and how she recovered and fixed it.
“Oh, I pulled a stunt and rented a thousand pink flamingoes … anyway, it’s a long story, but I spent a year paying it back …
“Chris, are you listening to me?”
“Yup I’m listening Mom.” (She is not listening; she’s finishing an order of t- shirts) Mom hugs her, leaves.
Texts from Saadia: Are you coming?
C: Coming to what?
S: Have you not been getting my texts? I met this great guy at the library and he’s asked me to the formal! You should come too; he wants to meet you. It’s almost sold out.
S: The Freshman Formal! (The social event of the semester for frosh, just before midterms)
C: Ugh, it’s midterms. I have to study. I’ve been so caught up in selling my shirts lately.
What’s this formal? And who is this guy?
S: You have to come. It’s one of the biggest social events of the year! His name is Blaine.
“You’re into big social events now? Ok. I like dressing up. But I have nothing to wear.”
Dress shopping. “I really can’t afford this – oh my god.”
“The most gorgeous dress. But it is $800, nearly my entire credit card limit and two months’ budget!! “
Christine putting dress on hold.
Rest of page: Can’t sleep. Tossing and turning while visions of two scenarios run through her head, a vision of going to the formal with the dress and without. Having an $800 balance, and not.
How long will it take me to pay this dress off if I make the minimum payments? Hey, that’s not much, $30 a month for an amazing dress!
Buys the dress.
Meets Saadia’s BF Blaine who is super nice and very wealthy. Christine likes him immediately.
One month later, night of the formal, wearing the dress, out with a group of friends, meets a friend of Blaine’s who is super cute, they hit it off, she tries to buy him dinner and her card is declined.
Embarrassment – she calls the card company,
C: I don’t understand, I made the minimum payment.
CSR: Yes, but you are over your limit. No, we can’t make an exception
C: How am I over my limit?
CSR: I’m just reviewing your file and there have been some purchases and interest charges since. You’ll have to make a payment to use the card again.
C: (thinking) Interest charges. I forgot about the interest charges.
The cute guy is taken aback but offers to buy her dinner. Christine declines and asks Saadia to pay for her dinner and taxi. Saadia is not super impressed but they are out and so she does.
Saadia and Christine have their first fight ever.
S: You need to be more careful and more thoughtful. This is just the start! And I’m worried about you. Dress is super-hot but $800? Are you even going to be able to pay that all off at the end of the month?
Christine stalks off. Formal almost ruined. Thinks to herself – Do I want to be fighting about money?
Goes home, does the math, calculates monthly interest.
C: If make the minimum payments, I’ll end up paying way more for this dress! Takes the dress off.
Goes back to store, tries to return it. Store owner does not let Christine return the dress.
Credit Card Revelations:
1) A credit card is for real emergencies! A new formal dress is nowhere near a real emergency!
2) Don’t buy anything on a credit card you can’t pay off at the end of the month!
C: Ugh, I can already see I am going to hate this dress every time I look at it. And I know I’ll NEVER wear it again. But it’s going to stay in the closet as a good reminder of bad decisions. Wow, I’ll need to sell twice my usual amount of t-shirts for the next couple of months to pay this dress off.
Two months later…
S: Hurry up, Christine, the show is starting.
C: I’m coming! Hey Saadia take a look at this!
Christine shows Saadia her nearly zero balance credit card bill. Saadia applauds. Christine tells her she likes Blaine. Saadia tells her she might be falling in love.
C: “That is so awesome, he seems like a great guy.”
Two of them sitting on the couch, looking comparatively pleased with their lot in life.
C: I think I’m getting the hang of this living on my own thing.
S: We’re getting there!
C: Let’s go get some dinner at Frenches.
S: I’ve got a better idea… Let’s keep that credit card balance where it is and stay in to celebrate.
C: You’re on!
More from the Me & My Money, The University Years Series:
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