As a college student, credit card debt is the last thing you need. You may think that you will not carry the same risk as others, but the truth is that the rules are the same for everyone.
Sure, the limit on student credit cards is quite a bit lower than for other applicants but debt is debt. Your balance may be only a few hundred dollars but the result of nonpayment is the same as for those who owe thousands of dollars.
The risk to college students is great because these accounts are used to establish credit. There is no record of good credit in your file to balance a late or missed payment.
If you are already in debt for student loans, adding even smaller credit card debt may be more risk than you should take.
Being On Your Own is Not Just About Freedom
When you head off to college, there is a sense of finally being on your own. You will be able to make your own decisions about where you go and when you sleep, eat and so on.
This is the first chance for you to live as an adult. However, part of that “adult” feeling is being in charge of money and carrying your own credit card.
Sadly, many of us know little or nothing about managing money when we head off to college.
You may have used your father’s credit card when shopping for clothes or buying books – but the bill doesn’t come to you.
If you are a lucky, credit card debt will be something that you are already familiar with before you even join the school.
The students that belong to this group are the ones with parents who didn’t hand them money on request through high school and required their son or daughter to justify and consider their purchases.
If you are taught how to use credit and the responsibility it entails, you stand heads above the average new college student.
Credit Cards Are Not (FREE) Money!
When you are a ‘first year’ crdit card debt will not be the first thing you will think off when you arrive to your new environment.
This is completely normal, and if you have experience with budgeting your own money you will probably not need to worry any much.
However, if you are one of these with no experience in running your own budget, you should know that you will be the answer to credit companies prey.
With other words, be very cautious and do not sign for the first credit card offer that comes into your way as it could cost you a lot of money!
This is easy to forget once you are paralyzed by your new laptop or cell phone. After all, when you spend cash for an impulse purchase you know there is less cash to spend for something else.
The credit card is deceptive as you can make a purchase and still have funds available for another purchase and another… Buying an item you need or want when it is on sale is good money management.
However, if you use a credit card for that purchase, the interest you are charged may make that a high priced deal in the end.
Many student credit cards usually carry higher interest rates than found on account where qualification is stricter.
Keep a Running List
It may help to keep a running list of every time you use your new card for a purchase. Over a time period of 2 or 3 months you can easily pinpoint any problem areas in your spending habits and take action to correct them before debt becomes a heavy burden.
Treat your new credit card as a training aid when you are in college. If you have extra fees or supplies you need for a course, it might be wise to use your credit line and spread the cost out a bit.
Buy only what you need, charge only what you must and pay your bills on time. If you do that you will graduate with a good start on a responsible credit rating with respect for money and finance that will serve you well.
