Broward Community College - Silver Sands Yearbook (Fort Lauderdale, FL)

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The average American has been described as one who drives a mort- gaged car down a bond-financed highway, using a credit card. He lives in a mortgaged home with furniture, appliances and household items paid for on the installment plan. Most junior college students have probably not been introduced to the world of high finance. Their only time pur- chase so far may be an automobile or Hotdogs Hamburgers and HIGH FINANCE NVWK 1 T663 I I rfb QQ ' vw O C, 2032 1- J? 3 to 6,3 U1 gp 5.23 Q Nei vi 7' oi 5 -Ultllgb TI p TIE 6, W F YI 3: W 1 7-2 IN I 14 by JOANNE SIFRIT ig is SIMM Q59 'DQ QEBIEJ some type of charge account. Soon many will be marrying and starting a home. If not careful, the unwary stu- dent may be bankrupt in ten years. A government survey reports that the average bankrupt man is 30 years old, makes a little over 855,000 a year, has a wife and three children, and owes creditors 371500, not counting the mortgage on his house. He is making monthly payments on a house, a car, furniture, refrigerator, washing machine, TV set, and several personal loans, which takes most of his pay- check. In addition he has other ex- penses such as utilities, medical bills, clothing, transportation and food. Credit is a way of life in many a family budget. It is estimated that one tenth of the 60 million American families have at least 407- of their yearly income allocated to debt pay- ments. In a study last year by U. S. News and XVorld Reports magazine, it was noted that down payments are get- ting smaller and time allowed for re- payment increasingly longer. Mer- chants have devised all kinds of charge it techniques available even without good credit. Pay checks are becoming more fully committed to installment payments. Many Amer- icans consider being in debt a way of lift- and show little interest in how much it costs to buy on the install- ment plan. The International Consumer Credit Association of St. Louis says, There is no such thing as an easy payment . . . those most susceptible to the 'easy credit' pitch are the poor and the young. They get talked into easy credit deals and end up paying more than they would at a reputable store. There are some advantages to time buying, and it is difficult not to use credit with the constant stream of credit advertising tempting you. By installment buying, a person in a low income bracket can live better earlier in life. He can have the nicer things of life that upper income people take for granted. And if informed, he can obtain credit at a minimum cost and avoid the unscrupulous merchant that sells more debt than a person can af- ford, and at exhorbitant prices. The University of Michigan Re- search Center has found that few people know what interest rate they are paying on installment purchases and loans. They are not interested in what the finance charges are. Their only concern is the amount of monthly payment. Many people are like the young man who after checking with three auto dealers said he had found the best deal . . . his old car and 382.00 a month. When asked for how many months he would have to make payment, he replied, Who caresl All I need to know is that I can swing the 882.00 a month. When a person decides to buy on credit, he is faced with one of several financing techniques. He may be told the amount of down payment and the amount of monthly payments for one. two or three years. Interest rates are not mentioned. He may be told 'that the interest rate is 675 or 36.00 per 3100.00 bor- rowed. Actually, this type of interest charge amounts to approximately 11.58Z, because the borrower is steadily paying off the 3100.00 His average amount of debt is about 85000. yet he is being charged a full 36.00 interest on 85100.00 A third technique is the buyer is told that his loan will be discounted at GZ interest. This actually means that 36.00 is deducted from 310000.

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Where Were the Students? It is true that SCA has a lot of problems. Our biggest problem is reaching more students, finding out what stu- 'VNS1' dents reallv want or, possibly, in the final analysis, if thev A 7,-W . . . . ' really care. . 4 tidy-f.x I don't think it was possible for a student to pass -S ' L A through. the halls of ICBC during campaign weeks with- Q 19' V out noticing that there was an election the next week. t ,, - But yet many of them did not exercise their great Amer- ff t Lg , ican privilege, the right to vote. Vlfhat ever happened to school spirit? Did it die over the summer during the transition between twelfth grade and freshman year in college, or is it just sleeping in our student body? In the boundaries of state and national government. if at person has a complaint or a criticism, he writes a letter to his congressman. So far this year, SCA has received only one letter of constructive criticism in its suggestion 3 box. M However, SCA does not believe that just because only one person has corne forth to air his views that there are not other students that have complaints or construc- tive ideas. Therefore, SCA is planning student preiodical grievance days. This will be a meeting between interested students and the student senate to find out some of the problems that students are Concerned with. This meet- ing will not be to solve problems, but to first find out what the problems are. JAMES MANCHESTER SGA President james Manchester, SCA President IP' :Xter- I I Board the H.MS.s Goocl lztmrnmeni if Ti 'll f X0 0 X i M M IHU unululnlrmm qi! Tx ., t H E S -x Mf:i2'eQ'L' - -I - 1 canmiggw W mil STNATE - au! if N H t -e K: to Fics 'u Pl ' jtffatfg- V G' , I Wa' ' 3 i ' ' 5 x x Q' .,, rt Q ' .. 'S s l' wtttv + publlca Us 1 7-x J.. .A 3 Owning if 13

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'1 -JOEAS DEPT- S-FCQE, -- pang DQPT. , FORNFVDRJE. OEPC caan Q DF-Prom . W ,f i x 'f I 1 - - i y ' iii f ,X ffgff . , I , 0 A 1 y 111317, In 1 , 1 if 11- X 1 la 1+-V fi 1fO'H'U7L1'i 'rf .e borrower only receives 39400, t the interest charge is on the full 00.00, bringing the annual interest e to 1276. Most dealers can offer different in- 'est rates to prospective buyers. The aler will pull out an orange card Jwing monthly payments based on 95 interest, or a grey card for 925. r may also have green, blue, white d red cards. All the various per- itages down to 576. The dealer ,nts as much interest as he can get. he charges SZ and the lending in- tution he deals with is willing to :ept 6513, he get a 296 kickback. That on 32,000 for a 2 year period is 0.00. On a 3 year contract it is 20.00. This is why some dealers 1 able to reduce the initially stated ice when a buyer begins to bargain. There are several factors that can vern interest rates. If the prevail- ing interest charge in a certain area is SZ, it may be difficult getting a lower rate. But try anyway. The dealer may accept. Most young con- sumers do not realize that interest rates can be flexible. The value of the item being fin- anced lias a bearing on the interest rate. If a lending institution loans 551,000 on something worth 82000, it will probably come out ahead in the event of repossession. If it lends 351,900 on S2,000, it could be in trouble, and will charge accordingly. If you have a bad credit rating the lending institution who takes you on can charge more interest. The dealer himself can cost you money. The money lender looks at the financial condition of the dealer to be sure he can pay any losses if the buyer should default on his pay- ments. If the dealer is shaky, the risk is passed on to the buyer in the form of high interest rates. For several years there have been bills in Congress to make it a law that the seller state clearly the actual cost of credit. Public support has not been sufficient to get this bill passed. The unwary customer doesn't seem to care how much he has to pay out to get something immediately. Because of easy credit, Amer- icans are going bankrupt in increas- ing numbers. In 1946, there were 10,000 personal bankruptcies. In 1965, there were 163,000, and the number is constantly increasing. A Utica, New York judge says, Credit is too easy. Second, credit is too ex- pensive for the poor suckers. A fel- low buys a trailer for S-1,000, and by the time he is through paying for it, he has forked out 552,000 in credit charges. VVhen applying for any kind of credit, the first economic lesson for the young consumer is never sign any- thing without reading it first. Last October in Los Angeles, 7,000 home- owners received identical notices that their interest rates were being raised from 6.627 to 7.62. The bank had a legal right in raising the interest rates because of an original lending agree- ment between the bank and the land developer. The fine print in the home- owner's contracts said, The under- signed . . . hereby assumes and agrees to perform all of the covenants of the developer's loan agreements. The people protested and over 2.000 be- gan picketing the bank. The bank, faced with mass public revolt, agreed to rescind the rate boost and abolish the escalation clause. Besides high interest rates, many lending institutions are making a kill- ing on credit life insurance. Much of the premium is pure profit because a good bit of it is funneled back in the form of commissions. or because the loan company owns the insurance company. Because of this, the finance company will work the insurance premium costs as high as possible. Another area in which young peo- 15