Credit Card Tips for College Students

Posted on 08/24/2010

The average college undergrad carries more than $3,000 in credit card debt, an increase of about a thousand dollars since 2004. While credit cards may help with buying a car or renting an apartment in the future, they can also create trouble. So as these young adults descend on college campuses, here are some credit card tips that they probably won’t hear in the classroom.

Stick with Cash - Money is tight for most college students. But dodge a bigger hassle once you’ve earned your degree by avoiding paying for expenses with credit. Stick with cash and when it disappears, don’t spend anything else.

Pay Bills on Time - Like it or not, your credit score is just like that biology class your freshman year: The results follow you no matter how hard you try to ignore them. So pay your bills on time and study hard.

Learn About Interest - The more you know about how interest rates work, the less you’ll probably rack up on your credit cards. You’ll start to see the real cost of that $80 botany book or $50 school sweatshirt once ten years of interest is tacked on.

Avoid Temptation - Credit card companies love college students more than Heidi Montag loves her plastic surgeons. They’ll do anything to get the attention of young cardholders including handing out free t-shirts, water bottles and Frisbees. Avoid the temptation by reminding yourself the true cost of that free gift.

Understand the Terms - Not all plastic is created equal. Some credit cards have better terms and perks. Make sure you choose one with a low Annual Percentage Rate and, if possible, no annual fee. Investigate credit cards with perks like airline miles or cash back rewards.

Don’t Be Average - The average college freshman carries $2,038 worth of credit card debt according to student loan company Sallie Mae. College seniors with at least one credit card graduated with an average balance of $4,138. So do yourself a favor and don’t be average when it comes to your finances.

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