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Credit Cards College Students

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Major credit card companies are very active on college campuses these days, but are they helping you or jeopardizing your financial future? Having spent several years in the collection industry, it has become apparent to me that college students are the fastest growing group of Americans to become debt ridden. Credit card companies make it very easy to get a credit card by showing up on campus and offering a free gift in return for the simple act of filling out a credit card application. What better candidate for a credit card than a person with no debt and a future college graduate income.

There are a great number of high school students that also have credit cards. By law, anyone under 18 must have a co-signer, but you would be amazed at the amount of parents that did not know their minor child had a credit card. These parents are usually willing to pay off there child's balance just to keep them from starting life with a poor credit rating.

The biggest problem for young people with credit cards is lack of knowledge when it comes to how credit works. They are often not aware that if they only make the minimum payment they will be making payments for a long time and will be paying a great deal of interest. They also need to understand that their payment must be received by the due date or they will be charged a late fee. Today some of these fees can be in excess of $50, causing their balance to get out of control very quickly. Many of today's credit cards also have hidden fees. It is essential that a cardholder understand what is written in their card member agreement.

Parents should start children out with a checking account. Adding a debit card is the next step. Once they have that under control, a credit card with a reasonable limit is next. Make sure your child understands how interest works and how easy it is to get in over your head if you overspend. If you have a $1000 balance at 18% interest and you make a $36 a month payment, it will take you about 9 years to pay the balance in full. If a college student charges this during his freshman year, he will have that balance paid off 5 years after he graduates.

The best thing you can do for your child, when it comes to their financial future, is to educate them about money and to set a good example. They are most likely to do what they have seen done.

Credit Cards College Students

You may or may not have a credit card... but if you're a college student, you're likely getting offers on a near daily basis. They show up in your mailbox and in your email, with you - the College Student - as the focus. On a tight student budget, they probably seem very appealing. It would be nice to buy that pair of jeans you can't afford or to be able to hang out with your friends at the coffee shop between classes; however, credit card abuse is a very real danger for college students. Before you decide to get one, or charge more on the card you already have, it's important to learn the dos and the don'ts.

Do - Find the card with the lowest interest rate you can qualify for. Your interest rate will determine the overall cost of your loan; and yes, it is a loan. Credit cards are not free money.

Do - Make sure you read the "fine print." Be sure you're getting what you think you're getting. Are there annual fees, membership fees, and/or sign up fees? Many a student has been surprised to receive their first credit card statement, before they've even charged a cent; to see a balance of $100, $200 or more.

Do - Strive to have no more than one credit card. The more credit cards you have equal the more debt you'll have when you graduate. Keep it to one and one card only.

Do - Make more than the minimum payments; even if only fractionally more. Optimally, pay the new balance off each month.

And now the don'ts

Don't - Be late on a payment. If you have a late payment, even once, your creditor can - and likely will - raise your interest rate.

Don't - Forget that incidentals add up big. A cup of coffee here, a pizza there, a few munchies for studying are all small potatoes by themselves, but when you do this throughout the month it will show in a larger balance than you expected. The best rule of thumb? Don't buy what you can't afford. If you have to charge something you can't pay off when the statement comes; make it something necessary.

Don't - Stop shopping around. You will continue to get new credit card offers and if you find a better interest rate; transfer any existing balance and close the original account.

Don't - Count on mom and dad to bail you out. You're an adult now and these are your finances, so be responsible. A nice side effect? You'll feel good about yourself and they'll respect you for making sound decisions.

You're in college to learn and, ideally, that should include managing your income vs. your debt. When you graduate with little to no credit card debt, you'll be glad you took the time to be smart with your money.

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About Author

Both Marjorie Salada & Kathy Burns-millyard are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Marjorie Salada has sinced written about articles on various topics from Gastric Bypass, Asthma and Credit Cards. Marjorie Salada is the owner of

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