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‘Don’t Be Lured into Credit Card Debt’: Prof. O’Halloran Advises Freshmen

They set up their wares as close to a college entrance as legally permitted. Then, they go to work, encouraging freshmen to sign up for what might turn into the biggest mistake of their young lives.

 “They” are credit card firm vendors and, as sure as leaves turn brown in autumn, they appear on the scene at the semester’s start, offering deals that sound too good to be true … because they are!

However, according to New York City College of Technology’s (City Tech) Patrick O’Halloran, there are ways to avoid the pitfalls of credit card debt, which averages $8,400 among all American households. A typical household will pay $1,200 annually in credit card interest.

“The golden rule with regard to your new credit card is to pay your account in full each month, so you don’t incur any interest charges,” O’Halloran says. “A $1,000 charge on an average credit card will take almost 22 years to pay and cost more than $2,300 in interest ($3,300 total) if only the two percent minimum payments are made.”

Other tips offered by O’Halloran, an assistant professor of hospitality management at City Tech and author of the recently published book, Unlocking the Door to Your Career, include:

  • Negotiate with the card company to have the annual fee (membership fee) waived, if possible.
  • Only have one credit card and be aware of what your “balance due” is on it at all times.
  • Research the credit card companies you’re considering. Review the annual percentage rate (APR); this determines the cost to you of using the credit.
  • Consider having an initial credit balance on your credit card; that is, pre-pay $500 in advance of any purchase you wish to make. By doing this you won’t fall for the mantra “buy now, pay later.”
  • Consider initially having a secured credit card, which requires maintaining a savings account to secure the line of credit for the card. The savings account generally equals 50 to 100 percent of the actual line of credit.
  • Confirm with the credit card company that you will not be required to make a minimum number of purchases within a year.
  • Always mail your payment check five to seven days prior to the “payment due date” to avoid incurring late charges.

“If you can’t pay off the entire credit balance when it is due, paying more than the minimum can make a big difference,” O’Halloran says. “If the balance is $5,000 and you can even pay an extra $150 each month, you will save hundreds of dollars in interest.

“Keep in mind that because of the high annual percentage rates on bad debt, not paying for what you buy right away will result in every item on your credit card bill costing more,” he adds.

If you do get into debt that is overwhelming, the non-profit National Foundation for Credit Counseling can assist with structuring a repayment plan. For more information, call 800.388.2227 or log on to


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