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Avoiding College Credit Card Traps
By: James Dimmitt
Congratulations college freshman! You’re about to embark on one of the most
exciting times of your life. By now your parents, siblings, and friends have
offered you all kinds of advice on how to make your transition to college
smoother - how to get along with your roommate, what classes to take and which
ones to avoid, where to find the best off-campus food, and how to stay safe on
campus.
One thing they may have not warned you about is how quickly you’ll be bombarded
with credit card offers. You’ll find them in your textbooks, in your mailbox,
and on every campus bulletin board. You’ll be offered free DVD’s, t-shirts,
music downloads, and more in return for completing an application for credit.
Why all this fuss over you for a stupid piece of plastic? Because they love to
recruit new borrowers, especially in your age bracket. They know, from numerous
studies, that college students tend to be impulse buyers. And even though your
impulse purchases tend to be small - pizza, coffee, beer, CD’s, cigarettes,
books, etc. - those small purchases can add up quickly.
Fifty-four percent of freshman students and 92 percent of sophomores have at
least one credit card. A recent study shows the average college student
graduates with between $1,500 - $3,000 in credit card debt.
Here are 7 tips to help you manage your college credit card needs:
1) Look for a card with the lowest fixed percentage rate and a low or no annual
fee. Read the fine print carefully - many low or 0% introductory rate offers
expire in 6-12 months.
2) NEVER use your credit card for a cash advance. The fees and repayment
structure associated with a cash advance are outrageous.
3) Have a budget! Your credit card is not free money. Budget your money so that
you can pay off your balance at the end of each month. If you can’t pay off the
balance, always make more than just the minimum payment.
4) Pay your bills on time, otherwise you’ll pay a late fee between $25-40 every
time your late with a payment. Late payments will also increase your chances of
having your percentage rate raised on ALL your credit accounts.
5) Request a low credit limit somewhere between $700-$1,500. The object is to
have credit available to meet some of your expenses and in case of an emergency.
6) Less is better. You don’t need more than one or two cards at the most. The
more you have the more tempted you’ll be to use them or to “max” them out.
7) Consider using a debit card instead. A debit card is linked to your checking
account and purchases are automatically deducted from your account balance. Of
course, make sure you have money in your account to cover any purchases you
make.
Using a credit card is a big responsibility whether you’re a college student or
an adult. Managing your credit wisely establishes a positive credit history
which will serve you now and well into the future.
Copyright 2005,http://www.yourfreecreditreportnow.com
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