Three Things You Need to Know for New Credit Card Holders

Having a credit card is said to be the first step of being a college student. Picking out the card for you and learning how to manage it properly and wisely is crucial for you. Many young citizens ages 18 to 24 have an average liability of $2,002 in their credit cards, this is according to CreditKarma.com.

This is why it is crucial you know how to handle your credit card responsibly before you get your hands on one.  Here are things you need to learn about credit cards. Before a client applies for a credit card, he is first given the summary of the conditions on the credit card. It is wise to look at these three words APR, Fees and Rewards.

Annual Percent Rate or APR tells you how much you have to pay the credit card issuers from month to month for the amount you borrowed from them. Currently the average APR is 14% to 16%, if you want a lower cost for your debt look for a smaller interest rate.

Fees or annual fees are the amount you are charged for the credit card whether or not you made a purchase with it. Student cards and secured credit cards have annual fees so if you are smart you will want to look for a card that has low annual fees or one that has none. Look at the balance transfer fee as well, cash advance fee and late fee to better prepare you in case you have to incur any of them.

Rewards are the perks and discounts you get for having a credit card. Find out how the system work is your card comes along with a rewards program. It will be a sure way to save and enjoy freebees at the same time.

Obama’s Mission to Cut Off Student Loan Interest Rates

The American President Barack Obama is taking the need for college education to the next level as he continues his campaign in convincing law makers to pass a law against the rise of student interest rates.

Obama is going from campus to campus to have his talk to students about his propaganda. The first of the list of universities he is scheduled to come to is the University of North Carolina. The president is doing this to convince the Senate to change a law from 2007 that imposes high interests for federal loans to people who are unable to finance college education on their own.

The issue of having less college graduates is due to the continuing rise in the price of education. From 3.4% the rate is to increase by half at 6.8 percent on the beginning of July if the American President fails to convince the lawmakers to prevent this.

Obama is trying desperately to convince his fellow politicians that education is important thus it must be attainable to every citizen, poor or rich. According to reports, debts from student loaning is more than the citizens’ debt in their credit cards. Thus, a further increase in the rate will discourage high school graduates to proceed to the university and get a degree.

Two years ago, an estimated amount of $25,250 was owed by students who were at their last year in college. This is more than 5% from the preceding years. This batch also included the most graduates that became unemployed.

But despite these reports, Obama has set his goals in going to colleges and enlightening students. After his visit in North Carolina, he will also go to Colorado and Iowa.

There are law makers like Mitt Romney that agree with Obama in his vision, and called on for an extension in the current rate. However, there are still others among them, Rep. John Kline that opposes this campaign. He says that it will impose a higher burden for tax payers, and the Congress must not just make laws based on one man’s good intentions because the policy might turn out doing more harm than good.

Financial Crisis for College Students

College in the United State is not a luxury everyone can afford. It costs so much and average citizens would be forced to get loans that could suffice the amount of their child’s tuition. But the problem is, these money lenders, parents and students who get financial aids for college often have no idea what type of loans they acquired.

About 7 of 10 of those that go to college get loans for the tuition, but the way the payment works is unknown to them. One example is Tom McWilliams, a major in psychology and computer science student is studying at George Washington University, and annually pays $60,000 for his tuition and his boarding fees.

McWilliams has no clue what type of loan he has if it’s from the government, or if it’s from a private moneylender, subsidized or not. This is one of the problems of college students right now. They do not know where the money that they get for their education comes from, they even have no idea how much they are paying the university.

The funny thing is, these money lenders have the freedom to let the client know about the financial situation of the loan or to keep them in the dark. According to Arne Duncan, Education Secretary, this is the reason why clients have no idea or often do not have enough clues about their loans. This cluelessness paved way to the tremendous amount of student debt in loans nationally.

The price for college education increases every year, this also raises the amount of loans that students would ask for. However, colleges are applauding the president’s current efforts in trying to pass a law that would maintain the college interest rates at 10% monthly. This is going to be a big help for college graduates in the future, but they will still owe money even after 20 years of their graduation.

Obama Calls for Lawmakers to Maintain Student Loan Rates

American President Barack Obama pushes for a pocket friendly interest for student financial aids issued by the government. This is part of his campaign for the coming elections.

The current president is addressing law makers to create a new law to preserve the 3.4% interest rates on education before they increase again on July. This will benefit 7.4 million student applicants. Obama believes that education should be affordable to citizens. This is a preparation for a possible demand for college graduates in the future. But as the demand increases so does the price of attaining this level of education.

According to reports, there are more unpaid student financial mortgages compared to credit card liabilities, this is discouraging less fortunate individuals from pursuing a college education. Getting into college is not a luxury for every American citizen, thus the president wants to somehow change this scenario.

To prove he is serious in his campaign, in the coming weeks, Obama will start visiting some colleges and universities in North Carolina, Colorado and Iowa.

This is also part of his strategy to convince law makers to take part of his vision. Some members of the Republican Party refuse to decrease rates because it would force them to impose higher taxes on citizens.

According to them, creating a “bad” policy for the sake of a presidential campaign is uncalled for.

The dilemma that they face is whether to grant the financial aid rates that would enable more citizens to step into college, and pile additional burden to tax payers. Or raise rates and save tax payers some slack.

Congress promises to look for a solution to fit the benefits of both parties. Hopefully, more citizens can enter college without imposing higher taxes. Obama believes that his solution will be beneficial for middle class citizens. The president explains that making interest rates higher for those who want to go to college will be just like cutting off the future of the nation.

If more people will not go to college because they cannot afford it, then it just means that America will sink because there are less people who will be professionals in the future.

‘No More Student Loans for Non-members’ JPMorgan

Banks in the United States are taking tighter measures against lending to clients who are not members of the entity. This new regulation is going to be adopted by the JPMorgan Chase & Co., as they would cease to give student loans.

According to Steve O’Halloran, a spokesperson of the bank from New York, the loan given to private persons when it comes to education has decreased. He adds, that the government is stepping up and is providing the aid that students need.

JPMorgan will now demand Chase accounts from their clients. Furthermore, they could only apply for a loan or credit-card to get the financial aid. The bank will still go on in collecting and processing loans that they had given to student. They will also continue to negotiate with other entities that are engaged in giving financial aids to students.

According to the American Banker, the decision of JPM came after they were cutting off loses. Student loans composed about $1 trillion of the bank’s shops and $2.27 trillion was recorded in its trial balance.

The loans decreased 15% ($13.4 billion) in 2009 and the doubtful accounts of the company increased in a very alarming rate. The uncollectible account was at 72% since 2009, this is according to JPM itself. In 2012 the bank made lesser transactions with student loans, they cut the number to only $300 million from 2010 which was $1.9 billion.

Since July of 2010, private entities were no longer allowed to give loans to those who were given financial help by the government. The financial aid for students became the main reason for the nation’s debt.

The Consumer Financial Protection Bureau is now conducting an investigation on private financial entities. They are also receiving protests from clients about them. For now, the agency has identified the largest money lender to be Sallie Mae, which had given $36 billion for student loans.