6 Things College Kids Should Know About Credit Cards
April 23, 2009
Credit card offers start pouring into the mailbox for consumers at a relatively young age. Most high school graduates will begin receiving such offers before leaving home for college and many more will get offers and promotional materials while in college. The promotionals may seem like a great deal but for most of the recipients, they do not yet know how credit even works. Without a solid knowledge-base of credit, students can be facing a life-long battle with debt and other financial difficulties.
Here are 6 things college kids need to know about credit cards:
Introducing Your Own Credit Report – Opening a credit card account will also likely be the start of your credit report. As many teens can’t wait to become adults, a credit report is certainly something that should not be treated with kid gloves. Credit needs to be used wisely at all times. What you do now as a first-time credit card holder will impact your future finances.
Credit Cards are Not Income – While it may seem so at first, a credit card is not a source of income and should not be used for convenience shopping, no matter how convenient is. Running up a balance and not being able to pay it off will ruin your credit fast at a young age.
Card Information Needs to Be Protected – There is a lot of concern about personal and financial safety, especially on the college campus. Having your wits about you when handling your own credit card is vital. Never give out your card number or other information to anyone in person or over the phone. Keep your card secure and never let anyone borrow it. Your card is your responsibility. Should it get lost or stolen, you need to report it right away and take the necessary steps to prevent additional fraud and financial damages.
Save Cards for Emergencies – When away at college, many students and their parents opt to have a credit card for emergency use. Understanding the difference between real emergencies and “emergency pizzas” can mean the difference between using credit wisely and destroying your credit. Emergencies should consist of flat tires, airline tickets, or necessary school supply purchases – not beer runs and movies.
Credit Cards Differ– Different credit cards offer different rewards, terms and conditions. It is your responsibility as an applicant to be sure you understand the agreement you are committing to and are capable of handling the terms. It is in your best interest to compare several different cards to be sure you are getting the best card for your situation. It can be tempting to jump at the first card offer that comes along but in the end, it may not be the most sound financial decision.
Look For Student Cards– While researching different cards, keep tabs on those cards designed specifically for college students. Many cards will offer benefits that cater to the college student which can be the best match for you at this time in your life. Some credit card companies even offer bonus awards for your academic performance.
