Web site teaches student finance
By Wafiqah Basrai
Oct. 6, 2008 9:48 p.m.
Nikki Sanders has never owned a credit card.
But after reading about the importance of credit through a national financial literacy campaign, Sanders is rethinking her decision and would like to get a card soon to start building up her credit score.
Started by the United States Department of Treasury, the campaign is meant to teach 18 to 24 year olds the importance of a high credit score and how to control their credit through an interactive Web site about debt management, credit history and credit scores.
Sanders, a fourth-year political science student, said she does not have a card because her parents discouraged her to get one because it is another expense they do not feel she needed to deal with.
The campaign was launched on Sept. 16 to provide those, like Sanders, information about the importance of credit and promotes the message “Don’t let your credit put you in a bad place.” It will also feature nationally televised ads and radio spots that are planned to be run over the next month.
The treasury teamed up with the Ad Council and Lowe Worldwide to work on the project.
“The campaign was designed to help that age group realize what they’re buying now could have an impact on their future,” said Beth Shanley, a spokesperson for the Ad Council.
The Web site features an online game called the “Bad Credit Hotel.” Participants have to navigate their way around a haunted hotel to pick up clues and information about credit to reach suite 850 ““ the number of a perfect credit score.
The game, however, according to both Sanders and Helen Nguyen, a fourth-year psychobiology student who also visited the Web site, was too time-consuming and seemed to fit a much younger age group. Both instead opted to read the “Information Only” section of the Web site.
For some, like Sanders, the information on the Web site was useful, but for others, like Nguyen, the information was too elementary and sections like debt management were common sense. Nguyen said she thought the information would have been more useful to her when she was applying for credit cards during her first year.
“When applying to credit cards, they don’t tell you what everything means. For example, they just assume you know what APR is,” she said. APR, or annual percentage rate, is yearly interest rate.
She said the Web site would have been more helpful to her had it given more examples that she could relate to, including how those who have two credit cards, like herself, can improve their credit score.
For Sanders, who said she knew nothing about credit before visiting the Web site, the information was useful.
“It was a really succinct way of telling me facts about credit that I will need to use in the near future,” she said.
“The information was definitely short and sweet ““ it wasn’t too much to process at one time.”
The site taught specifically about credit cards and how APR affects consumers.
It stresses the importance of saving and trying to pay off credit cards as soon as possible through a “real cost calculator” which shows how much interest is accrued for various purchases.
For example, if a $2000 computer is paid off in 11 months at an APR of 10 percent, the buyer is actually paying $2191 for it.
Nguyen said she recommends the Web site for freshmen or for those who want a basic, elementary understanding of credit.
“It’s good for freshmen, because they are bombarded with all of the credit card offers,” she said. “I think it would help if you knew nothing about credit.”
Because time slots for television and radio ads of the campaign are donated by various stations, gauging how effective the media has been is difficult since the agencies do not yet have records about the frequency of the ads being played, Shanley said.
She said it would take four to six weeks after the launch of the program to get data and feedback on the program.
The campaign was mandated in 2003 as part of the Fair and Accurate Credit Transactions Act, but work on the project did not begin until 2006. The group spent two years creating the campaign before releasing their project.
Visit the Web site at controlyourcredit.gov.
