Credit cards….most of you have at least one. Discover, Mastercard, Visa, they love to market credit cards to college students. It is a great way to build your credit…and it is an even better way to destroy it.
My freshman year I picked up a ringing phone and 10 minutes later I had my first credit card. I was going to be responsible…and I was…for about 2 years. Then I got another credit card because I had been so responsible with my first. Slowly I started charging more and paying less each month until I was close to my credit limit and could only make minimum payments. You would have thought that Visa would have done something, here is a 20 year old woman close to her limit and she only makes the minimum payment. Visa did do something….they increased my credit line. It became a cycle…I would get near my limit and then they would increase it.
I never worried about my growing debt…I was about to graduate college, I would get a great job and be able to pay it off in no time. Then life happened and I could not get that great job after graduation and life happened again and I could not work for 3 months. I could not pay my credit card bills and I was in the middle of a financial disaster.
6 years later and I finally have emerged from financial chaos. My credit score is improving but what happened 6 years ago still haunts me. When i went to buy a new car I had to pay a larger down payment and I am paying an insane interest rate.
I am not telling anyone not to get a credit card, but I am telling you to make better choices than I did. Here are some facts:
- 63% of college students have at least one credit card.
- Only 58% of those who own a card pay their balances every month.
- The longer a student has had a card, the less likely he or she is to pay off the balance.
Here are some tips:
- If you must have a credit card as a student, keep only one.
- Deliberately keep your maximum available credit as low as possible.
- Consider getting a secured credit card (you have to pay the credit card company upfront and what you pay is your credit limit).
If you need a credit card here are some things to consider:
- Finance charges
- Annual dues or membership, and enrollment fees
- Late payment and grace periods
- Special fees, changes in introductory rates, or penalties
You have to be your own financial advocate. Visa/Mastercard/Discover want you to have credit because every month you carry a balance…they make money, every time you are late with a payment…they make money.
Click here for more financial guidance.
Click here to learn more about money management at UNT.
Tell us in the comment section: Do you have a credit card? Why or why not?