August 21, 1998
Back to School, Fool

Charge 'Em - Pay 'Em

Last year Americans charged up more than $400 billion on their cards, according to RAM Research, a credit-card tracker. That'd be just fine, if it weren't for the interest they paid for the privilege. That $50 billion in finance charges could have bought the inventory of 5,000 Jag dealerships. Or a 2,000-season contract with Michael Jordan. Or Nike, the company, with $34 billion to spare.

How do those guys do it? Simple, they bank on the fact that the average everyday, blue-blooded, consuming college student isn't doing the math. After all, who in their right mind would pay 18% interest on every purchase? And lenders keep you by extending lines of credit, reducing minimum payment requirements, and inching up the interest rate.

But you, Fool, are not average. You understand the golden rules of plastic use -- pay off your cards every month, don't spend what you don't have, budget for the big items and emergencies. Still, debt happens. Especially around the holidays. So herewith you'll find some tips on helping you get a handle on it.