2008 Woodie Awards
Paper or plastic - Just swipe it
Jessica Rapp
Issue date: 10/2/08 Section: News
Give banks more credit.
Professor of economics David Gillette said the financial frenzy that has taken a stronghold in the media for the past few weeks has a greater effect on the coasts and that students who apply for loans or credit with local or smaller-scale banks like Bank of Kirksville shouldn't worry.
Gillette said he talked to a bank owner in southern Iowa who didn't seem to show much concern over the future of Midwest banks' operations.
"They've been much more conservative, less aggressive maybe in their lending practices, and in the time he's been president, they've had one loan go under," Gillette said.
Students shouldn't have any problem applying for a credit card, he said. In case people haven't noticed the fat pack of credit card applications they have received in the mail, banks urge students to add the plastic to their wallet.
"They want you," Gillette said. "Because first of all, they can borrow the money cheap - they can still borrow money at a single-digit percent and charge you double digits."
For instance, the bank can provide the applicant an initial rate of 9 percent but raise the interest after a few months, he said. Some credit card companies can charge as much as 21-percent interest rates.
"Those who understand interest earn it - those who don't, pay it," Gillette said.
Swiping responsibly should be students' priority when managing their credit, especially when they want to build a solid credit score. Tandy Murphy, senior vice president of the Bank of Kirksville, said students should watch where they spend.
"It's so doggone easy in our economy the way it is now to use that card for anything and everything, from a hamburger to a hospital," he said. "That's not necessarily a good thing. It can get you in trouble."
Pulling out the credit card for a soda at the gas station might seem like petty cash - easy to pay at the end of the month. But it can add up, turning that $1 Dew into a mountain of interest.
Professor of economics David Gillette said the financial frenzy that has taken a stronghold in the media for the past few weeks has a greater effect on the coasts and that students who apply for loans or credit with local or smaller-scale banks like Bank of Kirksville shouldn't worry.
Gillette said he talked to a bank owner in southern Iowa who didn't seem to show much concern over the future of Midwest banks' operations.
"They've been much more conservative, less aggressive maybe in their lending practices, and in the time he's been president, they've had one loan go under," Gillette said.
Students shouldn't have any problem applying for a credit card, he said. In case people haven't noticed the fat pack of credit card applications they have received in the mail, banks urge students to add the plastic to their wallet.
"They want you," Gillette said. "Because first of all, they can borrow the money cheap - they can still borrow money at a single-digit percent and charge you double digits."
For instance, the bank can provide the applicant an initial rate of 9 percent but raise the interest after a few months, he said. Some credit card companies can charge as much as 21-percent interest rates.
"Those who understand interest earn it - those who don't, pay it," Gillette said.
Swiping responsibly should be students' priority when managing their credit, especially when they want to build a solid credit score. Tandy Murphy, senior vice president of the Bank of Kirksville, said students should watch where they spend.
"It's so doggone easy in our economy the way it is now to use that card for anything and everything, from a hamburger to a hospital," he said. "That's not necessarily a good thing. It can get you in trouble."
Pulling out the credit card for a soda at the gas station might seem like petty cash - easy to pay at the end of the month. But it can add up, turning that $1 Dew into a mountain of interest.
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