ALBUQUERQUE, N.M. (1/30/15)--When starting out, managing credit card use can be tricky, especially in the college environment where young adults are just beginning to make financial decisions on their own.
That fact is made clear based on a recent study from Ohio State University, which found that younger Americans are carrying more debt and paying it off at a slower rate than any previous generation.
"A person born between 1980 and 1984 has credit card debt substantially higher than debt held by the previous two generations: on average $5,689 higher than his or her 'parents' at the same stage of life, and $8,156 higher than his or her 'grandparents,'" the study said (The Daily Lobo Jan. 29).
Fortunately, credit unions such as New Mexico Educators FCU, Albuquerque, N.M., with $1.5 billion in assets, focus on educating young members about how to approach credit cards when they first open one.
Anneliese Elrod, senior vice president of marketing at New Mexico Educators FCU, told The Daily Lobo that the credit union works with students to help them build credit and teach them how to avoid any pitfalls.
"(Being a student) is the best time to try and build credit," Elrod told The Daily Lobo.
Elrod also explained it's typical of credit unions to work only in a student's best financial interests, as credit unions are not-for-profit, cooperatively owned financial institutions; unlike banks, which are often only interested in their bottom lines.
Credit unions also can tailor cards to the needs of college students, Elrod said.
"Credit is probably one of the most important things you will ever have in your life," Elrod said. "Organizations or employers that are starting to use credit scores, you'll also see things like insurance agencies start to use credit scores. They are already using them."