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Credit Card Tips for Your College Freshman |
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by: Debbie Dragon
Nearly 90% of college students applying for their first credit card are freshmen. Realistically, the average college freshman does not have a checking account and possesses very little money management knowledge. Upon high school graduation, many students face adulthood decision while still thinking like a teenager. The wisest gift of guidance to give for now and the rest of their life is teaching them good money management skills before they acquire their first credit card.
Teach them they are building credit from square one for now and their future. Students need to learn there is a vital difference between good debt, such as investments that increase in monetary value, and bad debt which can quickly ruin their credit rating for years to come. Their line of credit, every purchase they make, and each bill they pay or neglect goes on their growing credit report.
Paying bills on time is critical when building credit from square one; this point can not be stressed enough. Future lenders and even employers can check on this to determine reliability, dependability and accountability.
Stress the importance of using the card for emergencies and essentials, not entertainment and everyday expenses. Show them the importance of comparison shopping for bargains and affordable places to eat. Fortunately, a line of credit for students is normally around $500 and seldom over $1,000.
Before your college freshman ever leaves home, help them create a budget that includes a category for credit card purchases. Teach them to deduct from their available funds whatever charges they make so the money is automatically set aside before the payment is even due. Many popular credit cards are now offering budgeting and money management tools so that purchases can be categorized in advance. You can even require your college freshman to enroll in a financial management class if they wish to keep the privilege of possessing a credit card.
Comparison shop with your college bound student for the best credit card deals before they leave the safety of home, because there are countless options available. Without mom and dad to help them decide, a college freshman may accept the first credit card offer that comes their way and on campuses today there are literally credit card kiosks awaiting them, supplying them with an overwhelming number of choices. Discover has a “Student Card” that offers 0% Annual Percentage Rate for six months. This can be quite useful when making purchases of text books, class supplies, and any last minute dorm-room necessities, like a quality espresso machine with an automatic timer.
Learn what penalty fees will be charged and make the student keenly aware of them. There are some credit cards available that do not charge an annual fee and have an introductory interest rate of 0% for six to twelve months. If a student has never possessed a credit card in their name, they may be completely unaware of Annual Percentage Rates, finance charges, late fees, or annual fees charged by some credit cards. These charges and fees, if unattended, can accumulate quickly and damage good credit they’ve established.
Teaching these credit card tips to your college freshman before they leave home is a huge parental responsibility. Utilizing a credit card can be an easy first step for a college student just starting to build their future credit history. For college students, they may already have limited options available for building good credit in their name, separate from their parents’ credit. Acquiring and utilizing a student credit card may be the most important money management skill a college freshman can learn as they enter the realm of adulthood.
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Credit Card Articles > Student Credit Cards > Credit Card Tips for Your College Freshman
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