Monday, March 2, 2009

Mistakes and Tips on Student Credit Card

By Shu Zheng

Questions about whether college students should have credit cards often arise in the recently years. Surveys and studies show that over 85% of undergraduate students have at least one credit card. It is common that around one third of college students have four or more bank credit cards, at least one gas-related card, plus two stores cards. And it is easy to see how the combination of easy credit can quickly add up to a potential for a bigger financial trouble.

There are some common mistakes that college students have made with credit cards:
· Opening a credit card for free stuff – In fact, these so-called free stuff are not free. After opening several cards for a few freebies, your credit score will get affected negatively.
· Taking the card out for night on the town – The only thing worse than a hangover is credit card hangover.
· Opening store credit cards for discounts – If you open a card in every store you shop, it will hurt your credit score. Plus if you have all those cards, you are going to end up spending more money.
· Overspending, then reporting your card stolen – this is breaking the law, better not do it.

So how should you manage your credit cards?
· If you think you really need a card, find one with good rate, and avoid annual fees.
· Keep spending on one card, and avoid opening more cards.
· Spend for emergencies, but not on expenses.
· Pay the bill on time.
· Say no to the cash advances.

For students, the debit card is an excellent solution to prevent ruining of credit score and carry strong personal financial responsibility.


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