When students leave home to attend post-secondary school, everything is new. All of a sudden they have more financial responsibility and often times struggle with budgeting. So, when they walk around campus and there are credit card company representatives basically handing out credit cards, of course they are going to accept them. The problem is, if students aren’t educated when it comes to credit cards, they may find themselves with a lot more debt than their student loans after graduating.
It’s important that students know how to handle credit before they are exposed to credit cards. Here are some tips for students and other first-time credit card users:
Treat your credit card the same as cash or debit. This means if you don’t have the money in the bank, don’t spend it.
Always pay-off your balance in full prior to the due date to avoid interest charges.
Avoid the urge to raise your credit limit. Your credit limit should never be more than what you can afford to pay in one month.
If you need larger amounts of money consider other credit options like loans or lines of credit, which have lower interest rates.
Credit cards are not an emergency fund and cannot replace savings. Using credit cards as an emergency fund can cause you to take on more debt than you can afford, which leads to bigger problems down the road.
Take the time to read and understand the terms and conditions associated with your credit or loan agreement. Ask questions if anything is unclear.
Students are left with enough student loan debt upon graduating. They don’t need the added pressure of paying off credit card debt as well.
If you are struggling with your debt, or know someone else who is, contact us for a free, no-obligation consultation. We will review all options and help you choose the route that’s best for you.
