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LCArticle_EarningCollegeCredit

Earning College Credit

April 29, 2015

College is full of exciting adventures and new challenges. For many, college will mark the first experience with managing your personal finances, and owning a credit card seems to come with the territory. A study conducted by the United States Federal Reserve found that the average credit card debt carried by undergraduate students is $3,173.00.1 While owning a credit card can help establish good credit for future needs, any misuse can have lasting consequences. A person’s credit report is often considered when applying for a loan or even applying for a job.   

As you head off in search of higher education, arm yourself with valuable knowledge on wise credit card choices, in addition to the ways you can avoid common mistakes that can lead to credit card debt.

Shop around for the best card.
Not all credit cards are created equal. Don’t select a credit card company simply because they have a booth on campus or a really cool commercial. Research which card may be best-suited to your spending habits and paying ability. Consider the following:
• annual percentage rate
• annual fees
• length of grace period
• dollar amount of penalty fees
• balance calculation method

Use prepaid cards or debit cards to avoid overspending.
Prepaid cards offer the convenience of a credit card without the risk of getting into debt. Your spending is limited to the balance deposited. Debit cards can also help prevent spending money that is not readily available, however, you’ll need to record all debit charges to avoid overdraft fees.

Monitor and limit use.
Charging can quickly get out of control if not monitored. Always be aware of the amount of money in your checking or savings account. Know how much you’re obligated to pay when the credit card bill comes due. If possible, use a credit card for specific purchases, like text books, or emergencies only. Never max out your credit card.

Be aware of the risks of credit fraud.
First and foremost, never give out your credit card number unless dealing with a trusted company or organization. Keep your card and charge receipts in a secure location. Never allow others to use your credit card. To keep an eye on your credit activity by ordering a free copy of your credit report every 12 months from one of the three credit reporting agencies – TransUnion, Experian and Equifax.

1http://www.statisticbrain.com/credit-card-debt-statistics/