There are similarities between the growing reliance on debt and the current environmental problems.  Is it really a coincidence that there is doom-saying talk about the environmental crisis at the same time as the growing credit crisis?  I’d say not.  In a way, they’re a product of the same type of thinking: short-term fulfillment without thinking about long-term consequences.  

Think about it: the environment is in disarray because we’ve gone for short-term profits or comfort without thinking of the long-term environmental damage.  Yeah, a giant SUV is comfortable and safe, but it has a terrible effect on the environment long-term.  The credit crisis is the product of a similar mindset: mortgage investors went for quick short-term profits in subprime mortgage that had limited long-term prospects.  The idea that ties the two problems together is one word: sustainability.  

So what can you do – short of buying a Prius, cutting down on electrical use, and the like?  This is a credit card blog, so let’s start there.  Here’s a checklist of environmental friendliness:

1. Sign up for online billing.  This doesn’t always work, so you may have to request that your bill is never sent by mail.  For instance, I signed up for online billpay for my cellphone.  They still sent me a printed record of the bill every month.  It seemed pointless and a waste of money on their part so I requested to have the record not sent. 
   
2. Cut down on pre-approved credit card offers.  One day deep in the future we’ll look back on our incredible wastefulness with paper the way we look back on doctors using leeches in medieval times.  It’s incredible that we receive mailings every day that we just throw away.  Either you can sign up with a credit monitoring service, which will cut pre-approved offers for you, or you can contact the major credit bureaus directly asking for these offers to stop filling up your mailbox.
   
3. Cut down on other credit card paperwork: the bill isn't the only thing your credit card sends you every month.  Most every credit card company will also send you cash advance checks throughout the month.  They'd just love for you to use these checks because they have twice the interest rate or even more.  Most people just throw these right in the trash (after tearing them up or shredding them, of course).  You can request that your credit card company stops sending the checks.  Here's a great article about how to do this, in addition to stopping pre-approved offers. 
   
4. Recycle whatever credit card mail you do get and don’t need: after shredding it so it doesn’t get into an identity thief’s hands.  
5. Get a green rewards card.  These are similar to cash back rewards cards except the cash back goes to an environmental cause.  Likewise, there are environmentally-friendly companies that are either environmentally safe or use the proceeds to donate to charity.  If you use a green rewards card with this type of company, you’ll be doing double the good. 

OK, this is a little strange.  I heard a story about a woman who wanted to find out about the man she was dating so she asked to see his credit report.  She thought this was better than getting a copy of the credit report behind his back.  She thought of it as a kind of prenuptial agreement.  She’d heard a lot about his previous relationships, but she want to know what kind of man he was…in the bank.  

Actually, even looking at a bank statement isn’t the best gauge of a person’s financial habits.  What if the person came into money recently but ten years ago was knee deep in debt and facing bankruptcy?  You never know what lurks in a person’s past, which is why she wanted to check her new beau’s credit report.   I want to go on record here that I don’t think this is the best course of action in a new relationship.  Certainly, you can talk about finances, but running a credit check on a significant other seems, I don’t know, too professional.  

Because that’s usually the capacity that a credit report might be checked: by an employer looking for a prospective employee’s financial history, or a landlord looking for the same.  I mean, if you really like somebody, is there credit rating even that important?  If it is then it seems like the relationship wasn’t meant to be.  Maybe I’m a romantic, but I thought there was more to a relationship than dollars and cents.  

However, if you are going to do something like buy a house together than it’s very well within your rights to discuss that person’s credit history, as that will be a very important part of the deal.  I have to think, though, that a calm discussion about finances is a better route than asking to see a credit report.  It just seems like it would create a strange dynamic in the relationship.  

This week on Experts on Credit, we’re talking a lot about college students and credit. The Finance Headlines highlights the importance of teaching kids personal finance tips. The Credit Nightmares blog offers an interesting take on college students and credit, providing data from a study done by the U.S. Public Interest Research Group. The study found a number of interesting facts about college student and credit bloopers:

 

Seniors in college had more than double the credit card debt reported by freshmen. That’s not too shocking when you think about it; four years of classes and naturally, you will have more debt than when you got your first credit card. But the numbers are high; seniors reported an average balance of more than $2600. That’s pretty significant when the kids in question probably only have a part-time job, if they work at all.

 

25% of survey respondents stated that they have paid at least one late fee since getting their first credit card. 6% of college students surveyed said that they have had a credit card cancelled due to non-payment. Ouch. 66% of kids surveyed stated that they had “at least” one credit card.

 

The optimum time to discuss applying for credit cards with kids is right before they leave for college. They’ll be inundated with offers for their first credit card once they leave home. Give children a solid foundation for managing personal finance and you’ll help them stay on track once they leave the nest.  

College students can benefit from applying for their first credit card. Having an established credit history at the time of college graduation can help young adults get jobs, insurance, apartments, car loans and home loans. But college students need to use caution when they compare and apply for their first credit card in order to avoid a credit nightmare.

 

The U.S. Public Interest Research Group did a study of more than 1500 college students from 40 colleges in 14 states. The study began in the fall of 2007 and ran through February 2008. The study provides important data about how college students use credit cards. According to the Public Interest Research Group study, kids use credit cards in “significant numbers,” which isn’t a surprise to regular readers of the Credit blog.

 

However, a real concern that arose from the study is the way that many college students are using their first credit cards. Late fees, delinquent payments and high balances were found far too often in the study. In addition, college students who applied for credit cards in the past and defaulted on their payments had significantly higher balances than kids who had never defaulted in the past.

 

Before college students apply for credit, they should compare credit cards to find the right card for their unique needs. A balance transfer card can help eliminate or at least reduce high credit debt. And student credit cards are designed for the unique needs of kids in college. Get tips to help you talk with kids about the dangers of defaulting on their credit and the importance of establishing a solid credit history before they head off to school.