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April 14, 2012 / The Career Closet

HOW TO AVOID CREDIT CARD DEBT WHEN ENTERING COLLEGE

This is a guest post from comparecards.com:
These days it is harder than ever before to afford college tuition, and student loans add a tremendous weight to the financial burden of college grads. School loans are, in fact, now the biggest debt that students incur while in college. But just a few years ago their largest debt came from credit cards. So that means two things. On the one hand, tuitions and college loans are getting more expensive. But on the other hand, students are getting better about managing their credit cards, so that they don’t rack up tons of unwanted debt on their plastic.
To help students continue this trend of shedding credit card debt, here are some tips for kids who are about to enter a college or university:

  • Be Realistic about What Plastic Represents

They call them “credit” cards, but that’s misleading because using them doesn’t give you credit, it causes debt. Remember that plastic is not the same as cash. Every time you pull out “credit” and carry a balance month to month you are paying the credit card company for the privilege of borrowing money. The privilege is expensive, too, so respect your plastic and don’t abuse it.

  • Use the Appropriate Kind of Credit Card

Some cards charge extra fees, while others reward you with cash back for doing things like paying your bills on time. Get a good all-around credit card geared toward the needs and spending habits of students and you can save yourself money while also getting a lot more benefit out of your card.

  • Take Advantage of Online Account Management Tools

Today’s credit cards all offer online access to free tools and resources like text alerts that warn you when your credit card debt is rising or you need to make a payment. Leverage these to your advantage and utilizing these tools, makes it a whole lot simpler to set a budget and stick to it, plus online account management is fast, convenient, and hassle-free.

  • It’s Okay to Leave Home Without It

Some banks advertise that you should not leave home without a credit card, but it is actually a good idea to leave your credit card behind sometimes. If you don’t have it at the mall, for example, you are less likely to overspend or binge shop and buy things you really cannot afford. So leave it at the dorm sometimes if you are easily tempted to treat your card just like “free cash”, something it clearly isn’t.

Follow these guidelines to use credit cards sensibly and responsibly, and it is possible to not only leave college without unnecessary debt but to also graduate with a stellar credit rating. Having a solid track record of on-time credit card payments and mature card usage contributes to a higher credit score, for example, and that will make other future loans easier to obtain and more manageable. That’s because the better your credit is, the more banks are inclined to offer you affordable interest rates and terms for more important things such as vehicles or your first home.
About CompareCards.com
CompareCards.com serves as an efficient navigational tool in the ever-increasing space of online credit card offerings. Started as a listing resource for consumers, the site has expanded steadily and now serves as a multi-dimensional service for users to compare credit cards side-by-side and utilize additional functions to manage their credit. The site analyzes details on more than 100 leading credit card offers and has been mentioned in Business Insider, ETV Public Radio, CBS Money Watch and MainStreet.com.  For more information, just visit www.CompareCards.com.

Your Success is My Success,

Keith Lipke

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Keith Lipke is a careers and college recruiter, coach, mentor and blogger at The Career Closet. His passion is to educate, inspire, and give hope to young people who need it upon their search for the right career and college.

www.keithlipke.com

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2 Comments

  1. Electric Echo / Apr 15 2012 11:02 am

    Great post! My parents always told me that credit cards are “evil” and I would have to agree. I mean, they’re important to have in situations that are actual emergencies, but other than that all a credit card is doing is promoting the spending of money that you have not yet earned. You’re going to need that money in the future, don’t waste it now on things you don’t need.

    • The Career Closet / Apr 16 2012 8:23 pm

      Hey Electric,
      Thanks for your comment! Credit cards can truly cause some major issues…and have for friends and family of mine!

      Keith

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