Should You Avoid Gas Credit Cards? by Elizabeth Kolles* (Guest author)

As young adults, we are often warned about the financial dangers of credit cards.  When it finally comes down to getting your first one, many opt for a gas or department-store credit card, simply because they are easier to qualify for than major credit cards.  If you considering applying for a gas card to build your credit, then you better think again…

Correspondent for the Wall Street Journal.com, Jennifer Waters, cautions individuals that applying for a department-store card, or even a bank/credit union-issued card may be smarter than getting a gas card.  She highlights important things to consider before committing to a gas credit card, such as the lack of discounts on the cost of gas.  While both store and gas cards typically include interest rates around 25 percent, most gas cards do not usually offer the discounts and special deals like department stores. Often many gas stations require non-fuel expenditures of at least $300 to be eligible for fuel discounts.  In addition, these gasoline discounts typically consist of 10-cents-per-gallon, which is not practical compared to what you had to buy to get that discount.

There are better deals out there.  Some major credit card providers offer 5 percent cash back on fuel purchases every three to six months. During that promotional period, you could receive $5 back if you spent $100, as opposed to some major gas cards which require you to buy about $200 worth of gas to earn $5 in rewards. Thus, those individuals seeking their first credit card should turn away from gas stations and head to their nearest bank, credit union, or department-store.   

If you are still not convinced that a fuel card is inefficient, think about this: With obligations like $300 purchases of groceries or other non-fuel items, you are likely to go deep into debt before you even attain your 10-cent-per-gallon discount. 

READERS, what do you think?

What do you think the benefits and downfalls are of having a bank or credit union-issued credit card?

What sort of things do you look for when getting your first card?

*Elizabeth Kolles is an undergraduate student with UK Department of Family Sciences

Reference

Waters, Jennifer. (2012, September 15). Few rewards with gas credit cards. The Wall Street Journal. Retrieved from http://online.wsj.com/article/SB10000872396390444426404577647723814473852.html?mod=WSJ_PersonalFinance_PF14

The High Cost of Rising Obesity

Recently, the CDC released updated statistics regarding obesity's prevalence throughout the United States. According to the center's 2011 survey, over a third of the American population is obese, or have a Body Mass Index (BMI) of 30 or higher. The results show that obesity has increased dramatically throughout the country. None of the states succeeded in lowering their obesity prevalence to 15%, which was the goal set by the CDC. In fact, many of the states increased their obesity prevalence to over 30%. These 12 states were noticeably concentrated in the South.  In Kentucky, for example, 30.4% of adults are obese, thus causing the bluegrass state to rank as the ninth most obese state (tying with Texas).

The high prevalence of obesity is concerning because of the health problems associated with the condition. Obesity has been proven to lead to certain cancers, heart disease, stroke, and type-2 diabetes. Obesity poses financial dangers because of these health problems. In 2008, obese people had medical costs that were $1,429 higher than non-obese people. Because of all the medical issues and costs associated with obesity, obese persons face higher insurance rates during their lifetime.

Financial costs are arising in other parts of daily life, too. Some airlines have obese passengers purchase fair for two seats when traveling. Obese workers also face job discrimination. They are less likely to be hired for some positions, or may be forced to take undesirable positions that pay less. One study found that obese women are paid 6.2% less, and obese men earn 2.3% less.

The financial costs of obese are troubling because obesity does not affect the population equally. For example, women of lower income are more likely to be obese than their high-income peers. The "obesity penalty" takes a more significant toll on these low-income women because they already earn less. With the current difficult job market and slowed economy, obese workers face greater challenges making ends meet.

When planning for your financial future, you should focus on more than just money. Your health has an impact on your financial success and your ability to reach your goals. Therefore, you may had want to create long-term life plans in addition to their financial plans. A holistic life plan, which would encompass health and wellness considerations along with the financial ones, will allow all aspects of your life to be balanced.

Readers, what do you think?

Do you think it is easy to control your lifetime weight is you plan ahead?

Why do you think it costs less to prevent obesity than to treat it?

References

Adult obesity facts.(2012, August 13). Overweight and Obesity. Centers for Disease Control and Prevention. Retrieved August 22, 2012, from http://www.cdc.gov/obesity/data/adult.html.

Cadrain, D. (2011, November 11). Boss says 'you're too fat'. AARP. Retrieved August 22, 2012, from http://www.aarp.org/work/on-the-job/info-11-2011/weight-discrimination-in-workplace.html.

Hill, S.C. (2009, November 9). "What airlines are charging for obese people?" Livestrong. Retrieved August 23, 2012, from http://www.livestrong.com/article/32373-airlines-charging-obese-people/.

Video Post: Think About Debt Before Graduation by Christina Barks* (Guest Contributor)

VIDEO: http://www.cbsnews.com/video/watch/?id=7423408n&tag=strip

            In this economy you have to get a higher education greatly increases your chances of getting a good job. However, college is expensive and many students (or their parents) cannot pay for all of it out of pocket or through scholarships. The reality is that most students obtain student loans, and subsequently go into debt. This is a hard concept for many college students to grasp. Many students don’t deal with repaying debt it until after they graduate from college. However, the delay  may cause some issues once they graduate, being suddenly obligated to pay back the debt plus all the interest.

Quick Thought:

            As noted in the video, if you don’t think about your debt before you graduate, then you might not be prepared for your monthly loan payments. One thing that the video talked about was finding a school that is in your budget. If you are currently going to a school that is too expensive, it might be wise to transfer to a cheaper school with your major. Another thing the video mentioned is paying off student debt while still in school. This is worth looking into so that you can cut down on some of the debt after school.

            With the unemployment rate rising it is important to know how much debt you are getting into and to have a plan to pay it off after school. If you have student loans, or are planning on getting student loans, you should look at your options for paying them back. There are many options to choose from, such as paying down the interest while in school, paying a set rate after graduation, and paying a rate based on income. Figure out what works best for you, and stay focused so that you can get through your schooling as quick as possible and with as little debt as possible. The sooner you pay it off the less interest added and the less money you have to pay in the long run.

READERS, what are do you think?

·         How do you plan on paying for college or paying off your debt after college?

·         Do you think that a college education is worth going into debt?

*Christina Barks is an undergraduate student with UK Department of Family Sciences

Reference

Quijano, E. (Performer). (2012). U.s. student debt over $1 trillion. [Web Video]. Retrieved from http://www.cbsnews.com/video/watch/?id=7423408n&tag=strip.