Tips For College Students To Use Credit Cards Responsibly

Some good tips to help college students with their finances, and avoiding the pitfalls of needing to use short term loans or get caught in a finance problem, which can leave a long term mark on your credit profile.

The “bank of mom and dad” can only help college students for a certain period of time, and then they will have to learn to pull on the parachute guide-strings by themselves. The funny thing about credit and credit cards is when you’re young, in college, and some other person (think mom and dad) is “footing the bill”, you could care less about starting a credit history on your own or starting and building it slowly but surely. And yes, young college students, what you do now under your own name, will follow you for the rest of your life. Good credit or bad credit, it’s your choice.

Credit card abuse has destroyed many individual people and families over the years simply because of one single word: discipline! College students who continue to use a credit card courtesy of their parents know that parents don’t mind paying for the usual necessary college required items, but most times they get fooled by their own kids, who use the credit card for more that just college activities. Think drinks, fast-food, gas, girl or boy friends and any other expense you can think of. And if you doubt this statement and live in a college or major university city, stand in line at the grocery store behind college students and see how quickly that available “bank of mom an dad” credit card is used for items that have nothing to do with schooling; it’s purely entertainment and $20 bucks “cash back” to pay for things like booze.

The best way for any parent to insure their student son or daughter learns how to establish responsible credit card discipline, is to co-sign a credit card with a designated limit (think $500 bucks). This way the student’s name is on the card as well as the parent. Following this credit path for one year, and insuring that all monthly payments are made on time, your student family member will be on their way to establishing a solid credit history. Here are a few discussions you can have with your student, or college-bound, just so they know who’s still in charge.

A – College and universities offer pretty good rates on credit cards, and generally are targeted to assist students.
B – For students with no past credit history should remember NO credit is good credit. And it can offer the opportunity to start and build a good credit history and FICO rating. A secure card could mean a co-signer (mom and dad) or your own cash.
C – Run a credit report annually. You can do it FREE from the government site with no strings attached.
D – Once your student gets a job and opens a bank account, make sure they get a checking account with a bank or credit union and insist they receive a “debit card” not a credit card. This way they will continue to walk down the path of building a credit history that will be gold, later one.