The utterance and emotional cry of collegiate independence is: “I have a credit card.” Or so it is thought by throngs of students flooding college campuses around the country.
A student’s excitement is wistfully damned by the pressure of credit card companies, who lure them into a cycle of debt through ploys of insignificant merchandising, and short-term interest-free cards; even waiving any past credit history.
The college student’s insatiable desire for immediate self-gratification coupled with poor management skills weaves its web of debt throughout the College years.
Students’ discretionary purchases total well over 53 billion per year with a 79 percent ownership by the senior year, according to Harris Interactive, a biannual survey of American college students.
A Texas A&M University study validates: ” . . . recent high school graduates are not knowledgeable about every day financial matters.” Are you one of the 32.5% who are?
Are you the type of person that can pay off your charges within 30 days? If not, you should rethink the pros and cons of having a card until you can handle the reality of the roller coaster ride you may be in for.
What is your attitude about debt? Is someone always bailing you out? Are you banking on postgraduate earnings to pay everything off? Do you wish to emerge with a degree and a financial debt greater than a starting salary? If not, learn to live without credit card dependency.
Don’t make easy access to credit an issue. Use a credit card as a tool; it will serve you wisely. Use it irresponsibly and you may live a stressful life of heartache and lack. That lack of payment integrity will be harshly penalized through a deductible credit point system. Learning to pay charges on time builds a sound credit history opening credit doors when needed most.
It may not mean much now, but when there’s a house, car or joint business venture in your future, you may have difficulty getting a favorable interest rate if at all. You may have to learn to live a life style far below what you have envisioned as part of any life goals.
A secret to staying ahead of the game: With any increased credit limit, do not charge up your account to the maximum. Once you go over 50% of your limit you are automatically considered “more of a risk.” You may find an interest rate rose even though payments have been made on time. This is also true, if you have several credit cards. While in college, build credit worthiness with one card.
Using one card is a wise discipline. It is a matter of training ones thinking. . .as many students seem to be perpetually short of will-power, and funds.
Preparing for the future by budgeting, equates to preparation meeting expectation, and a wonderful state called: “peace of mind.”
Allowing yourself to become overwhelmed by accrued debt, or in the position of filing bankruptcy, is “the black mark.” Like a shadow, it follows your trip through life for 10 gruesome years.
Don’t assume an interest rate of 10% to 22% is no big deal, or that short-term debt will be easily paid and is not a problem. The situation is not temporary. It is an ever growing monster of multiplying interest rates that can double, and the revolving wheel of credit destruction once set in motion can take an additional 10 years to recoup from. By then you should be around 38 to 40 years of age.
Knowing what to do and doing it is critical in establishing and maintaining a good credit history with an impressive credit-line upon graduation.
Bottom line, there is no best credit card for a college student. They are all high interest and maintenance. Consider a prepaid card to establish a cycle of paying upfront. One has the safety net of not overspending, with a card convenience while building credit worthiness.
If you’ve got it all together use a bank debit card, which forces one to pay cash. The danger is: If you can’t balance a checkbook, and keep good records, sack this idea. With the questionable neatness of many students, loss or theft is possible. If you’re a party animal, this definitely is a no-no.
Should you currently have a high interest rate card, transferring the balance to a lower rate card will help save money and get charges paid off sooner, especially one offering interest-free payment time. You may be tempted to keep the high rate card. Don’t it’s trouble with a big T knocking at your door. Cancel and shred it to prevent identity theft.
If you must have a regular credit card, check with the card companies on campus first, as to what you may expect after any introductory zero-rate expires.
A better option: Consider the Wire Plastic Prepaid Visa Card with free credit builder and overdraft protection: Visit: http://www.collegestudentcredit cards.net
If you have established credit, review The College Banking Package Offers at: USAA.com. Rates start in the lower digits to a high of 20%. Credit approval is a prerequisite.
Credit is more than an entry on the right-hand side of a ledger. The way one handles it defines the truth of our trustworthiness in transactions. It is the honorable reputation we build behind our name that opens the doors of opportunity, because we have discipline and have managed successfully.
That management is the master-guide of credit points adjusted monthly that can save hundreds even thousands of dollars in the market place of the world, or negatively impact such areas as auto insurance or keep you from getting a job.
“In the game of credit, every penny saved in interest dollars and fees is a penny earned along the nerve-racking road to financial success.” And, that’s the way it is.