Students should manage spending, be aware of theft
By: Lindsey Lewandowski
Posted: 3/14/05
When someone called freshman Rachel Berns at 7:30 a.m. about a month ago to confirm an order, she said she didn't think much of it, as she had ordered a book for class through the Internet using an ATM card.
She became suspicious when the caller knew her address.
And when the caller asked for her social security number, she said it - but changed one number.
Berns' next two phone calls were to her mom and US Bank in her hometown of Minnetonka, Minn.
Coincidentally, freshman Natalie Judd, Berns' high school friend, received a similar call. Although, when she asked the caller for a name and phone number, all she got in return was a dial tone.
"Those who are weak will say, 'OK, I'll use this credit card and hopefully be able to pay it when the bill comes.' " -Chuck Major Director of Housing and Residence Life
"Now that that happened, I've been a lot more scared even to put my social security number on forms," Berns said.
In a time when students receive an influx of mail from credit card companies, they should be aware of how to properly use the card and how to avoid identity theft.
According to the Federal Trade Commission, identity theft is when someone uses someone else's personal information, such as their social security number, name or other identifying information without permission to commit fraud or other crimes. Identity thefts may also involve credit card numbers.
Berns said she doesn't trust using credit card or check card numbers when buying online and that she's scared to sign up for credit cards.
"I don't want to get in debt," she said.
When she finds mail from credit card companies, she said she recycles it. And, from the front desk in Governors Hall where she works once a week, she sees similar envelopes every day in trash cans near mailboxes.
"I don't even think they make it to the rooms," she said.
Chuck Major, director of Housing and Residence Life, said it has no control over how much mail from credit card companies students receive. He said students probably find such mail in their boxes because they're easy targets.
"Those who are weak will say, 'OK, I'll use this credit card, and hopefully be able to pay it when the bill comes,' " Major said. "Some students are strong."
He said students should discuss credit cards with some type of adviser - maybe a parent.
"I think like any instrument, it's how people use it," Major said. "It's not the instrument that's bad. Potentially, it can be helpful for people if it's used correctly."
John Schroepfer, a personal banker at Wells Fargo, 204 E Grand Ave., agreed.
"They're very important when it comes to emergencies," he said of credit cards. "You have your parents, but if they can't float you the loan, at least you can support yourself."
He cited the example of needing to fix the car and not being able to get a hold of parents.
"If you have available credit on your credit card, you can take care of it right then and there," he said. "If your parents will reimburse you, great."
He said credit cards also are important because students who have one may learn to be more responsible with credit.
According to the Federal Trade Commission, a credit card can be more convenient to use and carry than cash.
Anyone at least 18 years of age who has a regular source of income may qualify for a card.
However, the commission warned that invitations from card issuers don't automatically mean credit will be granted - a person's credit report still must show he or she is a "good risk" for companies.
Fees, charges and benefits vary among issuers, according to the Federal Trade Commission.
Hence, it suggests shopping around for a card and comparing the Annual Percentage Rate, or a measure of the cost of credit expressed as a yearly interest rate; the grace period, or the time between the date of purchase to the date interest is charged; annual fees and transaction fees. Some issuers may charge if one uses the card for a cash advance, is late on a payment or exceeds credit limit.
It also suggests comparing customer service and other benefits, including insurance and credit card protection.
After the card comes, the Federal Trade Commission suggests signing it right away and filing the information that came with it in case the card is lost or stolen.
The card must be activated by calling the issuer, and the commission warns users shouldn't share account information or lend the card to anyone.
It also suggests keeping copies of receipts, comparing charges upon receiving the bill and "promptly" reporting questionable charges to the company - in writing and within 60 days after the first bill erroneous bill was mailed.
In the case of losing a card, the user cannot be held responsible for any unauthorized charges if it's reported before it is used. If a thief used the card before it was reported, the user may have to pay for up to $50 per card.
Berns said she was commended for notifying US Bank of the call she received.