Are
Student Credit Cards Right for You?
By: Christina Uss
Student credit cards are big business. Nellie Mae reported
that 76 percent of undergraduates in 2004 began the school year with credit
cards, representing billions of dollars in annual spending power. Credit card
companies court this profitable undergraduate market with student-specific
cards, which are set apart not only by marketing techniques, but also by their
credit terms and benefits.
No Income, No Problem
If you handle money intelligently, college can be the
perfect time to sign up for your first credit card. Curtis Arnold, spokesperson
for Citizens for Fair Credit Card Terms, Inc. and founder of CardRatings.com,
says, “It’s probably the easiest way to establish credit if you can use them
responsibly. They’re unique from the standpoint that they don’t require you
to have a job. No income, no credit record, no problem, you just have to be a
student at a four-year university.”
The on-campus credit card application tables have become a
common sight in many student unions and bookstores. Credit card companies
are eager to strike financial deals with colleges that allow them to set up
tables filled with eye-catching free swag, luring students with a giveaway
coffee mug or t-shirt to sign on the dotted line for a student card. Some states
have passed laws discouraging credit card companies from targeting college
campuses. Several companies have found success though direct mail campaigns
and have abandoned setting up tables on campus. Also, more
students are often getting their first cards while still in high school.
Terms & Benefits
Cardholders
with little income, including college students, will be charged a higher
interest rate to compensate for the higher risk of repayment. CardRatings.com,
which provides objective ratings of credit cards for consumers, finds a low
credit line and an interest rate in the mid-teens is reasonable for students.
Arnold warns, “Avoid any rates in the 20s like the plague.”
Kathy Witsil, senior VP of marketing at Chase, one of the
largest credit card companies, says, “The more information we have about any
customer, the better, so knowing you’re a student helps us assign specific
lending guidelines. The rates anyone gets really depend on their risk as a
customer.” If you have an established history of paying your bills on time and
a source of income, you may qualify for a “regular” (i.e., non-student) card
with more attractive rates.
Within the student card market, you’ll find a variety of
options, including reward cards that give users points to redeem for cash or
goodies. Chase has partnered with retailers like Starbucks, Amazon, and the Gap
to offer reward cards that let students redeem points quickly. CardRatings.com
gives a high rating to a unique Citibank student card that rewards good grade
point averages as well as on-time payments and staying within the credit limit.
However, for first-time card users, the reward component
may be one more complication that entices them to spend without thinking. In
order to learn the basics of charging and paying off monthly balances, stick
with a plain-Jane card with the lowest interest rate you can get.
Staying Credit Healthy
Fundamentally,
all student cards offer the same thing: a chance to establish a good credit
rating. In order to help educate students and other consumers about responsible
credit use, several credit card companies joined together to form Your Credit Card Companies, which
provides online resources for consumers to learn about the credit industry, and
works with the federal government to promote fair credit access.
Witsil notes Chase helps undergraduate customers learn to
become credit-wise by providing budget and payment guidelines with the card,
plus credit education tips in each monthly statement. Chase’s online account
access is a plus for students who can easily check balances, set up payment
reminders, and schedule automatic payments.
Arnold, however, worries that even with education, the
widespread availability of cards lets students slide down a slippery slope into
more debt than they can handle.
“It’s
easy to say your monthly balances are only temporary, and figure ‘I’m going
to make big bucks when I graduate.’ Then reality sinks in.”
Source:
Undergraduate
Students and Credit Cards in 2004: An Analysis of Usage Rates and Trends by
Nellie Mae, May 2005
The
Supply of Accounting Graduates and the Demand for Public Accounting Recruits
The
Supply of Accounting Graduates and the Demand for Public Accounting Recruits
Report—2005
is based on data collected from a survey of U.S. colleges and universities that
offer accounting degrees at the Baccalaureate, Master’s or Ph.D. level and a
survey of public accounting firms and sole practitioners affiliated with the
AICPA. The report is presented in two sections: “Accounting Graduates”
presents detailed information regarding the number of accounting degrees awarded
by universities for the 2003-04 academic year, and “Hiring by CPA Firms”
reports the hiring of recent college graduates by public accounting firms in
2004. Here are some of the
highlights of this year’s report:
Enrollments
in accounting programs continue to climb. For the four-year period 2000 to 2004,
enrollments are up 19% (to 171,000 in 2004).
Since
2000, accounting graduates are also up 19%.
The
increase in enrollments from 2003 to 2004 was 1.5%.
The
number of Bachelor’s degree recipients (40,400) increased 9% compared to 2003.
The
number of Master’s degrees awarded in 2004 (13,350) increased 5.4% for the
same period.
In
2004, 55% of accounting Bachelor’s and Master’s graduates were female.
Ethnic
minorities accounted for 23% of Bachelor’s graduates, 21% of Master’s
graduates and 38% of Ph.Ds.
In
2004, there was a 17% increase in the number of new accounting graduate hires by
the firms compared to 2003. The number of Bachelor’s hired increased 13% (to
15,000) and Master’s hires increased 33% (to 4,700).
Females
accounted for 53% of accounting graduates hired by the firms.
Twenty-three
percent of the firm hires in 2004 were ethnic minorities.
Regarding firms’ hiring trends,
estimates of percentage changes from actual in 2004 to predicted for 2005, 2007
and 2009 are optimistic across all firm sizes.
As You Prepare To Graduate...
By: Karen B. McCarron, PhD
The big day is almost here. You
are about to graduate with your accounting degree. What are you going to do now?
Hopefully, you interviewed and you have a job. If not, getting one is your first
priority! However, just think about all the free time that you will have now
that you are not going to be studying 22 hours a day (okay, it feels like 22
hours; it is really just 14). The reality is that you will always have to study
in order to be a good accountant. It is a life-long consequence of your chosen
profession. Everything in accounting---from statements issued by the Financial
Accounting Standards Board to the income tax law---changes in a nanosecond. Most
of you will be preparing for some type of certification exam, such as the CPA,
CMA, or CIA exam. Then, there is that fifth year of education that you
need---not to mention that you will be expected to work harder than ever at your
new job. If you want to remain an accountant and not "burn out" before
your career is well lit, you will need to find time for some activities that you
can enjoy.
This may be the first time that
you have been on your own...really on your own. Location has probably influenced
your job choice, and it is likely that you know something about your new
hometown (either through first-hand experience or pre-interview research).
However, you will have to do some more research in order to discover everything
that your new home offers. Once you know what activities are available to you,
you can decide which ones are appropriate in benefiting both your career and
your personal life. A new accountant usually has to build a system to include
more than professional responsibilities. While the process is not easy for
anyone moving to a new city and a new job, it is an extremely daunting task for
even the most enthusiastic fledgling.
Former classmates, friends, and
relatives who live in your new home can provide valuable information about the
expected amenities. If you don't know anyone in your chosen city (and it
happens), remember that your alma mater can provide you with all the help you
need in making new friends. Every college or university has an alumni
association; you may be surprised to find a nearby chapter. Call the alumni
society in order to obtain contact names in your area. You will, of course, have
something very important in common with the people you meet there. If you have a
religious affiliation, attending the church or synagogue of your choice can
offer that same kind of bond. As with any other career, the ability to interact
socially on a regular basis is especially critical to fostering both personal
and business relationships.
To learn more details about your
town and its activities, try searching the worldwide web. Nearly every city has
a website. Even in this computer age, the telephone book and local library
remain important sources of information as well. You can gather listings and
maybe even catch up on the reading you put off while in school balancing
numbers. You might even obtain important phone numbers and listings through your
local bank, your landlord, or even your new colleagues.
Now that you have an idea of how
to learn about your new home, consider what interests you. Whether you are
inclined towards art and culture, sports organizations, community service
activities, particular hobbies, or even caring for a pet, there are a variety of
outlets to fulfill your interests, and the information is at the tips of your
fingers.
You are always in luck when you
live in a city with a college. Almost everyone offers some type of continuing
education program where people go to learn new things just for fun without the
pressure of being graded. If you are not in a college town, many public school
boards offer similar programs. Again, check the Internet or the phone book to
see if these institutions have a continuing education office. Staying mentally
and physically fit complement each other in the long run.
Whatever activity you choose, the
rewards are immeasurable. Community involvement in any form is a necessary and
expected part of a successful accounting career. The relationships that you
forge can assist you professionally and maybe even become a lasting part of your
personal life. The degree of involvement is your decision. Obviously, your first
priority is to your professional responsibility, but you worked hard to get to
this point in your life; you deserve a little fun.
Karen B. McCarron is an assistant
professor of accounting in the J. Whitney Bunting School of Business at Georgia
College & State University, Milledgeville, Georgia.
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