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Credit Card Charges You've heard the horror stories about college kids who have charged up huge credit card bills that they can't pay. Don't fall into the trap. Before you pull out the plastic to pay for a DVD player just ask yourself if you have the cash to back it up. If you don't, you could end up damaging your credit. Let's take a step back from the adrenaline rush of spending and examine the ins and outs of credit.
In addition to having the ability to buy things the minute you need them, credit cards offer several advantages:
--"You don't have to carry cash.
--A record of purchases is created.
--It is more convenient than writing checks.
--It helps you to establish a credit history, which is necessary for the future purchase of high-cost items (house, car, furniture, etc.)."
"College Budgeting: What Is Credit?" 2002.
Students Say: Card Control
"My advice is to use the credit card once, then put it in a bag of water and freeze it, then get it out two months down the road and use it for gas or something you know that you can pay for, and freeze it again. This builds your credit history, but you don't have direct access to your card so you can't run up the bill."
--Senior, Spanish/Anthropology, University of South Dakota -- Vermillion
"Good credit has helped me with everything from getting utilities turned on in a speedy fashion to getting approved for my dream apartment. It was and continues to be totally worth the effort I put into it."
--Junior, Communications, Drexel University
"I have two credit cards in my name, though my parents are primary cardholders. I always pay my bill on time and it helps to build a credit history. Employers as well as lenders look at credit histories."
--Sophomore, Economics/History, Tufts University
Students Say: A Credit History Lesson
"I suggest all college students try to get at least one card in their name to help build credit. When you graduate and need to rent an apartment or buy a car it will give you some form of credit history. Just make sure to use it responsibly."
--Graduate, Communication and Culture, Indiana University -- Bloomington
"Realize that if you have a bad credit history, it will be difficult to make any major purchases -- such as that dream car. It's all about good credit . . . so don't get into any debt!"
--Junior, Biochemistry, Beloit College
"Always pay off your entire balance each month to insure you have a good credit rating when you graduate. Always pay on time and never leave a balance. My credit lines started out at $1,000 per card. They were up to about 10 grand total by the time I was done, and I had no problem getting an apartment in my name after graduation."
--Graduate, Hospitality Business, Michigan State University
"Good credit is better than having money in the bank because you can LIVE LIKE A RICH MAN AND PAY IT OFF LIKE A POOR MAN!!!"
--Senior, English Literature, St. Edward's University
When Good Credit Goes Bad
There's also the flip side to credit card spending -- when you start depending on credit to get by. Remember, there's no such thing as free money.
Know The Facts:
--"83% of undergraduate students have at least one credit card.
--The average credit-card balance for undergraduate students is $2,327.
--Students double their average credit-card debt -- and triple the number of credit cards in their wallet -- from the time they arrive on campus until graduation."
"Undergraduate Students and Credit Cards: An Analysis of Usage Rates and Trends." Nellie Mae. April 2002.
