By JEROD CLAPP
After walking the line and getting a high school diploma, graduates can expect something else once they’ve completed their K-12 academic career: credit card applications.
As part of a tour across the state, Indiana Secretary of State Connie Lawson talked to students at Jeffersonville High School about how to manage their finances, avoid sinking into debt and avoid investment traps while setting themselves up for the future.
She said after graduating, they can expect the lure of credit cards piling up in their mailboxes. But she said as some students prepare to take on student debt, credit cards can exacerbate money troubles.
“Many college students graduating today will leave with $7,000 to $8,000 in credit card debt or more, and that’s not including student loans,” Lawson said. “That’s because they lived like a professional when they were a student. When they get out of school, they’ll have to live like a student while they’re professionals.”
She said in many cases, students reach the maximum spending limit on one card, then apply for another.
Julie Straight, Jeffersonville’s principal, said she thought it was an important message to get to students, especially since the debt they’ll accrue in college will take a long time to pay off.
“In the world today and in the country, we know there are a lot of people really buried under credit card debt,” Straight said. “A lot of times, they jump into debt so quickly, they don’t even realize it. It takes them years to come back from that.”
Lawson said the compounding interest on credit cards makes it difficult to get out of debt. But she said keeping up with monthly payments can not only keep them away from collection agencies, but also improve their credit score for big purchases later in life.
“It’s not a bad thing for them to have a credit card, but they need to make sure they can pay it off every month,” Lawson said. “Make sure, obviously, if they have rent or bills that are due, they need to be paid on time. It never hurts to start putting, even if it’s a very small amount, into a personal retirement account.”
She said the earlier someone invests money for life after a career, such as an individual retirement account, the better.
But she said investing comes with its own risks, especially with the possibility of falling into predatory scams.
After showing students examples of Ponzi scam arrests in the state, she reiterated the importance making sure any investor they entrust with their money is licensed and registered through her office’s website.