Eighty-four percent of college students have at least one credit card. According to a 2009 study by Sallie Mae, the average college student is approximately $3,173 in debt. As each year in college passes, so does the average student debt. On average seniors have more debt that the average student. Their debt sits at around $4,100.
If you’re entering college, it’s important to proceed with caution, as college is a new, scary, and magical place. It’s the first time that most students are really with their parent’s guidance. It can be a scary place filled with smoke and mirrors, and if you can’t cut through the haze, then the consequences of debt and money mismanagement could follow you for the rest of your life.
Don’t let the college leave a blemish on your credit card history and ultimately your credit card report.
Here’s How to Find the Best College Credit Card:
1. Know Your Score. It’s good to know your score from the start of your credit card adventures, so you can know how the financial decisions you are making are affecting it. Get a free credit score from a web site like www.freecreditscore.com and continue to check your credit score every year. Don’t check your credit score too often, as that can deduct points from your credit score.
2. Ignore the Offers. It’s all hype. The credit card companies are known for throwing out great introductory offers to entice new customers. It’s important to know what you’re signing up for when you put your name on that dotted line. Credit card lingo can be very confusing, so spend some time flipping through the terms and conditions. On many cards, interest rates tend to go up after the first 12-month, so make sure you know when and what your zero percent interest rate will turn into in a year.
3. Use a Credit Card Only for Emergencies or Large Payments. A credit card can magnify bad spending habits. It’s important to exercise discipline when using a credit card, because unlike cash and debit, you can keep spending when there isn’t anything there. Because of this, it makes sense to separate credit card purchases from debit and credit purchases. To illustrate, use your credit card for purchases that you couldn’t typically afford with cash or debit. This logically breaks the large payment down into smaller payments that may be more affordable to you. On the other hand don’t use your credit card to buy daily expenses or things that cash or your debit card could normally cover. A credit card should be reserved for emergencies and large payments to avoid spiraling into debt.