One of the first things students discover when they start college is that they are suddenly being bombarded with credit card offers. Credit card companies love college students. For the most part, college students are a group of people who are out on their own for the first time, they seldom have a lot of available cash, and usually find that there are lots of things that they want to purchase, these factors usually make it easy to reach for a credit card. The truth is that student credit card actually a bad idea, if used properly, the credit card can help the student establish a line of credit and also provide them with funds during emergencies. Having a credit card while they are in college also helps teach students how to be responsible for their own finances. The trick is that the student needs to understand the potential dangers associated with the improper use of a credit card.
The students who graduate from college without a large amount of credit card debt are the ones who were responsible when using cards for college students. Being responsible with a student credit card isn’t difficult, it just means that the student has to use some common sense. Each time a responsible student reaches for their credit card they ask themselves if the item they are about to purchase is something that they really need and also question if they are going to be able to pay for it when the monthly credit card payment is due.
Don’t Forget about the Interest
Intellectually, the average college student knows that they are going to have to pay for the items that they purchased, that at the end of the month they will be getting a credit card bill. The problem that most students run into is that they fail to consider how much all the things they purchase add up to. When the monthly bill shows up, the student has no idea how they are going to come up with enough money to pay for their purchases. The same student is often afraid to tell their parents about the how much they purchased using their credit cards for college students. As a result the student either makes the minimum monthly payment or fails to pay the bill at all. There are several ways a student can prevent themselves from being haunted by credit card debt when they graduate.
Get a Job
College students shouldn’t rely strictly on their credit cards for finances. There is no reason why a student shouldn’t be able to hold down a part time job and still keep up on their studies. Having a part time job means that the student will be able to use cash for superficial purchases and save their credit cards for emergency funds. Having a part time job during college also means the student will have less time for things that cost money like going out to dinner or hanging out in the mall.
Avoid Multiple Cards
Another common mistake that many college students make is that they have to many credit cards. When it comes to credit cards for college students, less is always better. The more credit cards a college student has, the more likely they are to get in more debt than they can handle. When a student starts to get applications for credit cards they need to sit down and carefully read through each of the contracts and choose one card that has the best terms. After the student has picked the card with the most reasonable rates and lowest interest, they should stick to that card. The average student shouldn’t need more than two credit cards and most of them will find that one credit card is sufficient.
Students need to understand that credit cards should only be used when absolutely necessary. The problem that many college students run into is understanding what type of purchase is a necessity and what is a luxury. For example food is something a student needs, however when the student has to use their credit card to purchase food, they need to go to the grocery store and not out to their favorite restaurant.
Keep Track of the Credit Card
The final thing a student has to avoid is loaning their credit cards to friends. Whenever a student isn’t in physical possession of their card, they are no longer able to control what the card is being used to purchase. Refusing to loan out their credit card can save the student’s credit score, identity and probably save a friendship as well.