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Avoiding College Credit Card Traps
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.
© 2005, http://www.yourfreecreditreportnow.com
Author: James H. Dimmitt
James is editor of "TO YOUR CREDIT", a free weekly newsletter
with tips to help you manage your personal finances. Subscribe
today and receive his e-book "IDENTITY THEFT- How To Avoid
Becoming the Next Victim!" and other bonuses by visiting
http://www.yourfreecreditreportnow.com
MORE RESOURCES:
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