Read the following passage, which contains some underlined or numbered words or phrases.
Each of the answer choices contains alternatives for the underlines; choose the one that fits best grammatically or stylistically. If you think the original is the best answer, choose Choice ‘A’, or NO CHANGE.
Questions about specific parts of the passage or about the passage as a whole are identified by numbers only, not underlines. These will be associated with specific questions.
Money Management Skills for College Students
The first day of college, new students will be bombarded with a fleet of offers from friendly banking institutions. The
banks set up tables in front of the student union or the school bookstore and offers all sorts of “free” items to those
students who sign up for a “free” credit card. Students can walk away with T-shirts, pens, even backpacks. Of course,
all of these items carry the logo of the financial institution, so the student ends up becoming a walking advertisement
for the bank. Unfortunately, these “free” items can end up costing students a tremendous amount of money if not
understanding of how credit cards work and how they can damage credit ratings upon graduation.
Most teenagers understand about spending side of the equation, but few about saving and fewer still about managing
credit. All their lives they have watched their parents hand over a credit card, (9) but they haven’t watched them write
the check to the credit card company. Sadly, this has unconsciously given them the notion that credit cards are “free”
money. Since their first exposure to credit comes at college, they often drift into high credit card debt at exorbitant
interest rates, and leave college not only with enormous student loans, but also very high credit card balances. In order
to avoid this financial disaster, here are a few tips for new college students on managing their new financial
Since all credit cards are not created equal, you should shop for the best card before making a decision to apply for
credit. Here are a few of the features of credit cards, and what to consider when making that decision:
• Grace Period: The grace period is the amount of time you have to pay off the existing balance before the credit
card company begins charging interest. Look for a credit card with a grace period, and always make sure you can pay
off the balance every month. This way, you only pay for the items you purchase, and do not pay any interest.
• APR: The monthly interest you pay on any unpaid balance is called the APR, or Annual Percentage Rate. The lower
the APR, the better, if you ever have to “carry a balance.” The smart thing (most financially sound) to do is pay
off your balance as soon as the bill comes due every month because then the APR won’t matter.
• Annual Fee: Credit card companies frequently charges a fee for obtaining a credit card. Try to avoid cards that
charge an annual fee, but if that isn’t possible, pay off your card promptly every month and in a year or so, ask for the
annual fee to be waived or reduced.
• Penalty Fees: Financial institutions often make a lot of money on fees for missing a payment, going over your credit
limit, or paying late. Granted, you should try to avoid any of these things by paying your card off each month, but
should any of these events occur, try to find a credit card with the lowest penalty fees.
Finding the right card, with the most advantageous features, will probably not happen accidently, or by you
choosing the first credit card at the table in front of the college bookstore. While choosing your first credit card is
not as exhaustive a process as choosing the college you attend, you should invest some time and research into which
credit card is the best fit for you.
College is the first opportunity for students to establish a personal credit history. While it may not seem important in
the moment, a good credit history will make life much easier in the years ahead. After college, the graduate’s ability to
rent an apartment, buy a car or a cell phone will depend on the credit rating that the student has built up by properly
using credit cards during their college years.
Created for Albert.io. September 2014
All their lives they have watched their parents hand over a credit card, (9) but they haven’t watched them write the check to the credit card company.