December 12, 2008
Debt Education
By Student Credit Finance
Is a college student credit card and your young college student a deadly combination? It does not have to be! If you have done your job in teaching them about credit and debt they will do fine. It is still scary when we think about our children having credit cards and gas cards and all that debt. I can feel your pain.
On top of a college student credit card debt a college degree itself has become a necessity in today’s world. And college students are doing what ever is necessary to pay for said college degree, including taking on much more debt than they should. An average college student debt level has more than doubled in the last twenty years, and nearly two thirds of all four year college graduates will have to have several college student loans.
As college costs continue to grow, more and more college students will have to borrow to pay for their degree. What can we do about this for our college students? Really, the only thing we as parents can do is strive to teach our young college students a couple of things.
- What is Credit?
- How to manage it?
- What can it do for you?
Let’s start with number one. What is Credit? Credit is a time allowed for payment for goods or services obtained on trust. When we are given credit we are given the opportunity to buy something or have a service performed for us with out payment. This is a heavy responsibility that is not always easily obtained. So we move on to the next question.
How to manage it? Credit is a privilege. For a college student, having a student credit card is the beginning of there credit history and score. We all know how important it is today to have a decent credit score so we need to do the right thing and make the right choices. By using your student credit card as an emergency tool while in college, you will learn to keep the debt in control and manageable. After all, you are going to school full time and maybe working part time. You really do not have a large surplus of funds laying around so you have to manage what you do with that card and make sure you are able to make the monthly payments every month on time. Paying it off if possible is a huge score buster.
Our last question, what can it do for you? This is the big one. Using your student credit card as an emergency vehicle allows you to make your payments on time and to have the funds when a true emergency does come up. You are teaching your self how to handle your credit and debt. It does take a lot of while power, but is so well worth it. When you graduate you are going to have debt that had to happen in order for you to obtain the college degree. Do not put your self in the situation to have credit card debt as well to go along with the student loan debt.
Understanding the three simple questions above will only help to insure your college student’s success not only in the financial world but in all of life.
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