Back to College: Resist Maxing Out the Credit Card

It’s that time again: summer is drawing to a close, and students are gearing up for a return to college. At the beginning of each semester, students often have money from summer jobs, left over funds from financial aid, and other sources of cash (i.e., Mom and Dad).

Unfortunately, as the semester progresses, funds dwindle at lightning speed. Students strapped for cash are targeted with unrelenting credit card offers that are often too tempting to resist. Once you are buried in student loans, what’s a little bit of credit card debt, right?

The Credit Card Act of 2009 prohibits credit card companies from advertising on college campuses. Enacted to protect the susceptible wallets of college students, credit card companies have found a loophole in the form of the U.S. postal service. With promises of rewards, 0% APR for the first several months, and other incentives, these offers seem like a dream come true to those who have exhausted their money supply (or are truly desperate for a pizza). What students often fail to realize is how easy it can be to become overwhelmed by debt.

Maintaining good credit takes a lot of discipline, but college campuses are not arenas for frugal living. Rather than treat it as a tool for building credit, students often make unnecessary purchases, with the idea that they will be able to pay it off “eventually.” A few late night snacks here, a college sweatshirt there, and that new electronic device that just couldn’t wait all lead to a maxed-out credit card.

To avoid overspending, college students should understand the basic responsibilities of having a credit card. First of all, purchases should not be made if you can’t pay them off the same month. A credit card is not “free money,” and with the added interest, items will cost much more than they originally would have if you had paid cash. You should be aware of your billing cycle, knowing when the payment is due each month and how to make the payments (online, through the mail, automatic withdrawal from your checking account). Most importantly, moderation is the key to surviving credit card debt.

Although recent legislation prohibits those consumers under 21 years of age from gaining a credit card without substantial income, those without the proper resources are still finding credit cards in their hands. Student credit cards are designed to be easy for students to get their hands on, and with offers soaring in through the mail, it is hard not to accept at least one. It is important that college students are educated not only on how to use a credit card but the dangers of irresponsible use as well. Without the right spending strategies, a credit card can easily destroy a student’s credit long before graduation day.

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