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This case is available in MyFinanceLab.
Maria will be a college sophomore next year and she is determined to have her own credit card. She will not be employed during the school year but is convinced that she can pay for credit card expenses based on her summer earnings. Maria’s parents have read a number of articles about the problems of credit cards and college students, including examples of students leaving school after a downward spiral of credit cards, overspending, working to pay bills, worrying about bills, working more hours to pay bills, and eventually withdrawing from school. When Maria showed up with a handful of applications including Visa, a Gold MasterCard, Discover, a Visa sponsored by her university, an American Express, a secured MasterCard, and a gas company card her parents were overwhelmed. Maria admitted she didn’t want them all. “I’m not stupid,” she declared. Since Maria obviously needed to learn about credit cards, her parents agreed to cosign her application on one condition. She had to approach her choice just as she would a class project and research the following questions.
Shopping for credit can be compared to shopping for any other consumer product—consider the product’s cost, features, advantages, and disadvantages. In other words, does the product meet the user’s needs? Help Maria compare her credit choices given the applications she has collected.
Important rules for M to avoid credit card fraud or identity theft are as follows:
• M should keep a detailed list of all of her credit and debit cards and other accounts, including the 24-hour customer service phone numbers, in a safe place at home.
• She should keep the social security card in a safe place.
• She should protect her purse or wallet.
• She should protect her mail and trash.
• She should be cautious of the false call.
• She should safeguard her personal computer.
• She should check credit card and bank statements carefully.
• She should check credit reports with the national credit bureaus.
• She should report suspicious activity without any delay.