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Everything else seems to get out of hand in college — your credit card debt is the last thing that you should be worried about. Yet, a credit card can prove helpful during college. It’s just that you have to be careful and monitor your accounts, money and credit.
Whether you’re beginning college or this is your last semester. College is a pretty big and expensive ordeal. If all goes as planned, you can expect to go to class daily, meet up with friends, and finish up in four years with a degree. What you might not expect to be doing is dodging credit card offers and running from debt.
Here’s how to stay out of college debt:
Stay Away from Enticing Offers: While the CARD Act attempts to prohibit credit card issuers from campaigning on college campuses, chances are that if you’re on campus, you’ve already been solicited. Over 75 percent of students report that credit card companies have targeted them through tables on or near campus, according to a study by the U.S. Public Interest Research Group.
While the giveaways may seem worthy of your personal information, college students should be wary. When credit card bureaus assemble your credit report they look at each credit card application, and the number of credit cards and inquires when putting together your credit score.
Read the Fine Print: It’s important to cut through the smoke and choose a credit card that works the best for you. Before you go to college, it makes sense to establish a checking account. While the two cards are different, a checking account can teach you bits and pieces of money management. For your first checking account, consider opening with a parent to ensure that you don’t miss any payments or if you run out of money, you will know where to get more.
Get a Credit Report: After you have understood the basics of monitoring a checking account, you should proceed to find your credit score. Free websites like www.freecreditscore.com help you find out where your credit score stands. Once you get the score, you will know which cards are more likely to approve you or suit your needs.
Spend Wisely: After you get the card, use it wisely. Having a credit card may seem like a blessing, because of an instant access to funds, but it can also hurt you when your spending habits get out of control. It’s important to exercise discipline when using a credit card; it makes more sense to use it to purchase expensive items that you normally couldn’t afford --as it will break down the lump sum into smaller and more manageable payments. Items such as laptops, cameras and other electronic equipment should be paid for with credit. It makes very little sense to use your credit card to buy your daily caramel Frappacino. In the case of the latter, the debt will last longer.
All in all, it’s important to know what you’re getting into before you get into it. College is a place ripe with new experiences, and credit debt is a trip you don’t want to take. Credit card lingo can be very confusing, so make sure you understand the terms and conditions outlined in the particular card you choose. Interest rates tend to go up after the first year, so make sure you know what your zero interest rate will turn into in 12 months.
