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College Student Credit Cards And Debt

College Student Credit Cards And Debt

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College Student Credit Cards & Debt


Why do credit card companies lure college students?

Credit card companies want college students to carry their card because you're at a naive stage in your life where you may not know better. You'll spend a lot of money on the credit card and pay only the minimum amount required which means more money for the credit card companies.

Anther reason is loyalty. Once a person has a card in their wallet, they are likely to keep that particular card and its upgrades for years to come.

Robert Manning, Ph.D., Professor in the College of Business at Rochester Institute of Technology and author of Credit Card Nation, says the credit card industry has changed radically in the past decade or so. "Previously, conservative rules deemed a good customer as one that paid their bills on time. Now, a good customer is one that can't repay their debt." Banks make money by charging annual fees, late payment penalties and interest fees on unpaid credit card balances. Therefore, card holders with revolving debt (those who do not pay their balances in full each month) are the most sought after college student.

The banking industry has learned that college students will draw upon various sources of income to pay their debt. This includes student loans, money from part-time jobs, and as a last resort, many will ask a family member to supply the funds to get them out of debt.

Financial debt is one of the highest reasons that many students end up dropping out of college.

You may still feel like a teen but it's time to take charge of your life which includes your finances and manage them as an adult. The sooner you do, the sooner you'll be able to start saving and spending your own money.

Your college years can be some of your most memorable and some of your most costly. They don't have to be the beginning of a life drowning in debt. Credit cards should only be used an Emergency Funds. Emergencies that include car maintenance, family emergency trips home or unknown college supplies.


Make credit cards work for you, not against you.


Used wisely, credit cards can be helpful throughout college, and can assist you in the development of financial management skills.


As soon as you get your first credit card or loan, you have entered the world of credit reports and scores. A credit report is compiled by credit bureaus and contains information about your identity and credit relationships, among other things. Credit scoring is a system that lenders use to help determine your 'credit worthiness.' If your credit score is bad you could lose the simplest of things such as being able to rent an apartment.

Future jobs and insurance premiums can also be influenced by your credit score. By paying your bills in full or in a timely manner, a credit card will help you establish a good credit score.

Don't misunderstand credit cards

Students that seem to have the most credit woes? Those who believe their standard of living during and after college should not vary from when they lived at home on their parents income. Cable television, cell phones with cameras, and new cars become 'necessities' instead of un'needed luxuries.


Enroll in a personal finance course as soon as your schedule allows. If it's not required coursework, take it as an elective. You will learn a set of life skills that will not only help you right now, but also after college and for the rest of your life.

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