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[ Thursday, Nov. 12, 1998 ]
Counseling helps reform students’ bad credit habits
By CARRIE DZWIL
Collegian Staff Writer
College students craving financial freedom often turn to credit, but once students have cards in hand, the temptation to spend can result in maxed-out plastic. For students in this financial peril, help may be on the way. Organizations such as the National Foundation for Consumer Credit and Consumer Credit Counseling Services can help students regain financial control. These places consolidate monthly credit bills for students and may even be able to lower the interest rate on the cards. CCCS is a member of NFCC, a national nonprofit network of organizations dedicated to financial counseling for those in credit card debt. Individual CCCS branches handle credit counseling differently. Michelle Black, of the CCCS branch in Altoona, said a debt management program contacts creditors to set up a payment program for their clients. "We will set up an appointment with a professional counselor who will explore any options available to help a person get in control of their finances," Black said. At CCCS, clients make monthly payments to the company, who in turn pay creditors. In exchange for payment, Black said, creditors will stop making collection calls, accept lower monthly payments and reduce monthly interest rates.
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Regaining financial control: the first steps
1. Know your financial status: list regular monthly expense, income and assests 2. Track your spending for one month: carry a notepad and record everything you buy including prices 3. Identifying overspending: review the gathered information and identify the areas that could be trouble spots for spending 4. Develop a monthly spending plan: income should be higher than expenses. Make sure absolute necessities like food and rent are covered each month, then cut back in areas that are not so necessary 5. Gather support: family and friends can be a positive support system. Let them know your plans so they can help, too SOURCE: www.citibank.com |
CCCS does not deal with an individual's credit report, Black said, but they organize budgets for clients to maintain once their credit is stable.
Megan McGraw (senior-media studies) has reached the limit on her card, but she does not think a credit counseling program is right for her.
"I think I'm responsible enough to handle my credit cards," McGraw said.
McGraw doesn't have a job, but she manages to pay the minimum on her credit card. Her parents help pay the bill, she said, but she is still almost to the point of considering plasma donation as a way to obtain cash.
JoAnn Volinsky, secretary at CCCS of Northeast Pennsylvania, said potential clients first fill out forms outlining their financial status. Once the amount of debt, income and expenses are profiled, meetings are scheduled with a professional counselor who will negotiate a monthly payment plan with creditors and credit holders.
Once a monthly payment plan is agreed upon, credit lines are cut, and a client is no longer allowed to possess any credit cards, Volinsky said. On some occasions, creditors will lower the monthly interest rate to help customers pay off their bills more quickly.
Jen Soltys (junior-kinesiology) said she maxed out her credit card on necessary items like food, books and haircuts. Because she doesn't have a job while in school, her mother helps her pay off the minimum on her credit card. She has never considered going to a credit counseling agency.
"I don't think it's that bad. Once it gets paid off, I'll cut up my card so it doesn't happen again," Soltys said.
NFCC charges a small fee for the service, Volinsky said. The first meeting is free, but a good faith fee of $20 is required after that, she said. This money will then be credited to a client's account after three consecutive payments.
When clients miss a monthly payment, the action taken against the client usually depends on the creditor policies, Volinsky said. Stores such as Boscov's will automatically drop a credit holder after one missed payment when the holder is in a credit counseling program, she said.
"If a client misses three consecutive payments then they are dropped from the (NFCC) program," Volinsky said. "They must call again, fill out all the forms and set up an appointment."
Students can find help for their credit problems on the Internet at World Wide Web sites like www.Powersource.com/cccs, www.nfcc.org and www.citibank.com.
