Back to School, Back to School, Beware of Credit Cards, You You You!

Way back when I was a freshman in college, there was a day before all of the classes started called "Orientation Day". Despite the name, most of the vendors at the event were people (or I rather say vultures) with table setup ready to give away gifts for kids to sign up for credit cards.
I remember being one of those kids.

Going from table to table, vendors would give away t-shirts, cups, dorm supplies, even sports tickets to kids when signed up for credit cards. The only requirement is that you had to be 18 years old.
Carrying a credit card can be a definite power trip in college. For my its the first time they get access purchasing power like never before.

You can be sitting at a table with two or three friends and when the check comes, everyone reaches into their pockets while you pull out your credit card and utter three magic words: “I got it.”
Then, some time in the not-so-distant future, along comes the credit card bill, and the memory from the restaurant is now a haunting one. You compare the balance due on the card with the balance in your bank account and suddenly realize that you need to pay for it.

Welcome to to credit cards, freshman!

There are positives:
They are convenient.
It’s safer than carrying cash.
You’re covered in an emergency.
You have a record of all your purchases.
If you pay off the balance every month, they help you build a good credit score.

There are negatives:
They are too convenient.
It’s hard to remember how much you spend until you receive a bill at the end of the month.
They can damage your credit score if you don’t pay them off every month.
They offer minimum payments

Can you use a credit card responsibly? Credit cards are betting that you don't. They want you to max out your new card. They want you to make the minimum payment or even to forget about paying off or down your balance.

This is how they make money. Fees and interest. While they grant you a 30 day grace period, that time flies by. Once it's over, your debt clock begins. Everyday you carry a balance after that grace period, the amount you owe grows.

There have been studies finding that over 85% of college students had at least one credit card and 50% had four cards or more. The average debt was $4,100. The average debt goes up every year

Life after college is tough enough. You don’t want to carry a running credit card debt of $4,100 or anything close to that into the next phase of life. It can destroy your credit score and make it difficult to get car loans or home loans after graduation.

Just be sure when you pull out your card, you’ve got enough in your bank account to cover whatever you’re about to charge.

A good credit score can also make a huge impact on a student’s life.

Employers are becoming more serious about credit scores and credit background checks. According to to the Society for Human Resource Management, accounts in debt collection can have a 49 percent impact on your chances of getting hired.

This adds on to the pressure of getting hired and being “established.” You might make a false impression to potential employers because you failed to maintain excellent credit.

Students need to use their credit card as a safety net, not the net that traps them and brings them to rock bottom.

Keep track of what you spend by saving receipts, and recording the amount.

Remember, having no credit is better than bad credit.


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