Car insurance for young drivers

Most of you are probably well aware of the fact that different age groups of drivers get different insurance rates, and the difference can be quite significant. Why the discrimination, you might ask? Well, don’t haste with accusing insurance company with unfair pricing, as there is a set of reasons behind such practices. When speaking about age groups and pricing, you have to understand how the insurance companies assess risk and set the rates you get when quoting.

The primary factors determining the price you will pay for insurance are risk and claim history within your demographic group. Insurance companies analyze the costs of insuring each age group and set their rates respectively. And due to a set of reasons, young adults are considered to be the most risky car owners, thus the high rates a young driver will receive when getting insurance quotes. That’s because young drivers have a larger claims history as a group, and the accidents they end up in tend to be more devastating and costly. Of course, it doesn’t mean that all teenagers and young adults get crazy on the road and have serious accidents. But that’s the situation when one has to pay for other’s mistakes, and unfortunately there’s little you can do about it.

But little doesn’t mean nothing. If you are a young driver looking for good auto insurance, you still have chances of getting better rates if your follow some of the following advices. Of course, they won’t drop your rates instantly and dramatically but by combining them you will be able to get quite reasonable car insurance rates.

Be a good driver

Being a good driver with a clean driving record with no accidents or traffic violations always pays of no matter how old are you. But you can go beyond that. Enroll in special driving schools and employ a defensive driving style – having proof of your good safe driving abilities will definitely give your significant discounts from the insurance company.

Buy a safe car

When you are young, you want to be fast and furious. That’s your right, but if you buy a fast sports car don’t expect to get advantageous auto insurance quotes for it. Sports and muscle cars are considered to be risky and have high insurance costs, so insurance companies will always charge more for owning a Mitsubishi Lancer Evo than for a VW Golf. That’s why you should think about the car you want to drive before actually buying it.

Do some comparison shopping

Shopping around has never hurt anyone. In fact, getting more auto insurance quotes from different companies will help you find a really competitive policy. Some companies give young drivers lower rates than others, so why not spending a bit of your time on comparing auto insurance quotes if you can save quite well on it? Besides there are so many free quote sites out there that it would be simply a crime to leave such a great opportunity for saving some money on car insurance unnoticed.

Posted in Articles at April 22nd, 2010. No Comments.

Healthcare for young adults

There are several options available to maximize the chance for children to be included in a health plan. Employer-provided plans routinely offer cover for family members and adding children to private plans is relatively inexpensive. For those families with low incomes who cannot afford cover, there are federal and state funds available to pay for basic cover. But all these options disappear when the child becomes an adult. This is the magic time everyone used to look forward to. Finally, the law recognizes people are old enough to take responsibility for their own actions and removes the built-in protections. Except, of course, these new adults are either still in full-time education or joining the group with the highest unemployment rate in the country.

For young adults going through college and university, this is the time when debts are really starting to mount up. Tuition fees and living costs take years to pay off. Adding in the cost of a health plan is often the straw that breaks the camel’s back. Even though all the better colleges and universities offer good value group insurance, this is one additional cost too many. Younger people take the rational view. They have good heath and statistics on their side – the statistics show the vast majority of people enjoy good health during the prime of their lives. The main risks come from accidental injuries with many hit with big bills following traffic accidents. So most young people put off the decision on buying into a health plan and hope their parents will solve the problem for them.

This calculation may be about to change. The insurance industry applies a simple formula to set premium rates. It guesses how much it is going to pay out over the next twelve months, adds its operating costs and a profit margin, and then divides this total among all the people holding a policy, i.e. everyone in the group pays a more-or-less equal share. Because millions of young adults opt out, the cost of medical treatment falls unevenly on older people and those with existing medical conditions. The premium rates for everyone would fall if the cost of the nation’s medical bills was divided between all adults. That’s why the legislation working its way through the House and Congress includes proposals to make holding an insurance policy mandatory or to fine people who do not have a health plan. This is a form of single payer program because it matches the idea that all the employed should contribute a percentage of their earnings toward universal health coverage.

Cheap health insurance is the big political hot potato right now. But, if medical costs are to be controlled and everyone is to pay only a fair amount for insurance, some changes will have to be made. Mandating insurance for the young is not a bad way of paying for universal coverage. As it stands, health insurance companies routinely refuse cover for people with pre-existing health problems. Allowing a redistribution of the additional costs of treating these people among the fit and healthy is the fair option. Whether the politicians will think so is another matter. The Republicans believe this infringes basic liberty. The Democrats are not united. It’s going to be interesting to see who wins the argument.

Posted in Articles at March 3rd, 2010. No Comments.

Student Credit Cards Are A Step Towards Financial Responsibility






A recent addition to a college student’s must-haves is a credit card. Along with the cell phone, the credit card is becoming more and more prevalent among young people ages 18-25.

Perhaps it is but natural for credit companies to mine this previously untapped market. More and more products and services are being targeted towards these customers. And the more cool stuff is out there, the more they will want to buy – if not with cash, then on credit.

Unfortunately, the problem with swiping away plastic is just that – students fail to realize that with each swipe they are one step closer to debt, which they may be unable to manage. That is why it is important that the right information on the judicious use of credit cards be made available to students.

That is not say that a credit card per se is a bad thing. In fact, when used wisely, it becomes a smart way for young adults to build their credit history, which they can continue to build on as they becoming self-supporting professionals.

Having a credit card also teaches students financial responsibility – showing them that it is important to live within means. It makes them aware of concepts such as principal, interest, balances and debt. The earlier they get comfortable with these, the better they can cope further on in the future.

On the other hand, young adults can still be prone to financial naiveté particularly when it comes to fine-print terms and conditions. Perhaps in the excitement of being issued their own credit card, they may simply skim over, if not totally forgo, reading the terms and conditions the credit company stipulates over the use of the credit card.

It is possible for someone of that age to be content in knowing that their card offers 0% APR. What they may not be aware of is that the offer is for a limited time only or that if monthly payments aren’t fully paid, a high finance charge will be applied.

Although nearly 80% of college students today own more than two credit cards, it is unfortunate that less than half are able to pay off the monthly balance. This only proves to show how little effort is made to educate students on the right usage of a credit card.

If you’re a student considering getting or already owning a credit card, or if you know someone who does, here are some things to help you get started on learning how to use a credit card wisely and to manage finances in general.

- Consider the nature of your income and how much of it is stable income.
Credit card statements come in monthly. Therefore, you should know how you would get the money to pay for these. Stable income is important because you will be relying on this to make those regular payments. If you don’t have a steady source of income, rethink getting a credit card. Continuing with one in spite the lack of a stable income will run you into debt in no time.

- Observe your credit limit.

Unless you specifically ask for it, a credit company will set the limit for you. To avoid unmanageable debt, your credit limit should be around 25% of your stable monthly income. So even if you’ve topped off your credit, you’ll still be able to pay off the monthly balance. If your credit limit is beyond 25%, call your credit company right away and ask for an adjustment.

- Designate purchases

Credit cards should not be your primary method of payment. It should only be a means to bridge gaps in your cash flow. As early as possible, develop the discipline to limit certain purchases for your card.

For example, it is a practice of some to charge important things such as rent and utilities to a credit card. The rationale for which is that even if the cash income is delayed, payments for the essentials will not. However, the idea is that the balance will be fully paid off by month’s end.

These tips should get you started as you build a good credit history. You may start out small now, but as you learn good financial management early on, in the future, handling bigger things will hopefully be easier.

Posted in Credit Cards at April 17th, 2009. No Comments.

First Credit – Student Credit Cards






Once a young person enters college, there’s a whole range of new responsibilities that have to be faced. One of the most important is the art of managing often limited finances. Student credit cards are specialty cards offered to initiate young people in the use of credit. No income? No credit record? No problem! The only qualifying factor is that they an enrolled student at a four-year university.

Anyone, including high school students, can apply for one of these credit cards, but they’re generally meant for college students. Although these cards may be easy to get, they typically charge heftier fees and interest rates, and smaller credit limits.

Young adults generally have no established credit history. Young people with limited experience and no established credit history are often frowned upon by credit card companies. However, those who are attending college with their focus on the future demonstrate a degree of maturity and responsibility that gives companies a bit of assurance that they will be able and willing to take care of their debts. Also, parents are often willing to come to the rescue to pay the bill, especially if they’ve co-signed for the credit card.

Two Types of Credit Cards

Secured Credit Cards – The student will be spending money that has been deposited in a bank account in advance. With this type of card there is no risk of accumulating long-term debt or interest. Cards are also available that allow parents to link a student’s card to their personal account, or let them keep refilling the teen’s or student’s accounts as they go along. It will cost an enrollment or annual fee and additional fees each time money is added to the card.

Unsecured Credit Cards – This is a traditional credit card that is an actual loan from the bank. No advance deposit of funds is required. Interest is applied to the balance carried from month to month and is often substantially higher than other credit cards. This type of card is much harder to get approval than a secured credit card.

Details of the Best Offers for Students

• The lowest APR card will help when a balance must be carried from one month to the next. An interest rate in the mid-teens is reasonable for students.
• A long grace period will allow for a longer period of time before you have to pay interest.


• Look for a ‘no annual fee’ offer.

• Employed students are more likely to be approved, as it shows responsible behavior.
• Be truthful on your application. It will increase the probability of getting the best rates, as the company will verify all the information on your application.
• Online account access is a plus to easily keep track of balances and payments.

Using Student Credit Cards Wisely

Begin with a budget that can be easily managed each month and stick with it. Even though new credit card consumers are typically offered a limit of $500 to $1,000, limit yourself to what you can repay each month. Safer than cash, use your credit card to purchase student necessities.

Student credit cards that include rewards are available through major issuers like Citibank and Chase who has partnered with retailers like Starbucks, Amazon, and the Gap. Be careful that the rewards don’t entice you to spend outside your budget just to earn the reward.

Posted in Credit Cards at April 4th, 2009. No Comments.

Should College Students Have Credit Cards? The Pros and Cons

Like any situation, there are pros and cons to whether or not college students should have credit cards. Bear in mind that, like anything major, everything depends, first and foremost, on whether or not the student is financially mature and responsible.

Statistically, about 76% of college students have at least one credit card; many have more than one. One of the major pros to having one is the fact that, if used responsibly, they can help young adults build credit. After college, having credit is very important, as it helps one get a car, a house, and other forms of credit. So, not having the credit that is accumulated by a credit card can be crippling.

Of course, there are two sides to every coin. If the student is irresponsible with the credit card, It could lead to high debt and a poor credit score.

Despite this, credit cards also have many more pros. They guarantee protection in purchases, enable online purchasing, and guarantee relief in times of emergency. Knowing this, any parent can feel secure that their child is well looked-after.

Credit irresponsibility can also be addressed. If you, as the parent, don’t believe that your child is responsible enough to handle a credit card, all you have to do is explain everything about credit and credit cards to them before they leave for college. You can explain to them how they will need good credit after college, and how to maintain that good credit through responsible credit card use. Explain to them where the money for credit cards comes from, and how to avoid identity theft, and how to use it responsibly and maturely.

Though the cons may be serious to owning a credit card, they can be turned into pros, as parents influence their children to credit card responsibility.

Posted in Credit Cards at March 5th, 2009. No Comments.

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