Student Credit Finance

Student loans, the rising costs of tuition and textbooks are all necessary evils of getting a college education but they pale in comparison to the temptation of maxing out college credit cards. The pressures of passing exams are nothing compared to the financial burdens of mounting credit card debt that many students face. According to published reports students are accumulating over $5000 worth of debt and the surprising part is that some are starting college with debt already in hand.

The implications of insurmountable debt are bad for anyone but for college students it is a lot worse. Riddled with calls from bill collectors some students drop out of college in order to take on jobs to repay credit card debt. Those that stay on in school face financial ruin that hamper their abilities to rent an apartment, buy a car and even get a job that will provide the income they need to pay off debt. Depression can set in resulting in lower grades and even suicidal thoughts.

Credit cards have been around forever it seems but generations before did not face problems such as this. For instance back in the 1980s student credit card limits never went beyond $300-$500 and parents had to co-sign. Rising credit  limits, higher costs of education and creative ways to beat the co-sign requirements are death traps to unsuspecting students.

As much as we would like to blame the card companies for their underhanded marketing tactics to this impressionable crowd the fact remains that if students are educated about proper financial management they would be in a position to exploit the benefits of credit while avoiding the pitfalls.  Parents need to start talking to their children more about the responsibility of using a college student credit card.

Teaching financial responsibility to kids go beyond calculating interest rates on growing balances. It’s all about teaching them to develop immunity to cutting edge advertising tactics and understanding the importance of spending within a budget that does not involve credit. Here are some other things that parents can do to help out.

•    Co-sign on their children’s credit application.
•    Find a card with no annual fees and low interest rates.
•    Explain the proper use of a credit card.
•    Review monthly expenses.

Students also have a special role to play in safeguarding their financial future. They can:

•    Understand the true cost of things they purchase with the card if they let finance charges pile up.
•    Keep records of all open lines of credits and include fees, interest rates, balances, purchases and payment due dates. This way they can take the steps needed to make payments on time.
•    Pay more than the minimum payment on the card balance.
•    Pay down cards with the highest interest rates first.
•    Stop charging unnecessary items to the college credit card.
•    Talk to someone if they feel that their debts are getting out of hand.
•    Understand how poor credit scores will affect their future.

College student credit cards can prove to be a great resource for a student making his/her way through college. Making use of all the tools available is the best way to avoid and get out of debt.