Tips for Students Considering Applying for a Free College Student Credit Card
Thinking about applying for a college student credit card? Credit cards can be helpful for building good credit, but they can also be a college or university student's worst enemy.
For many college students it's hard not to give in to what seems almost like free money with those free credit card applications all over campus. Too many students who give in to the templation use credit cards to satisfy impulse urges to purchase, without any plan for how to pay off their ever-growing credit card debt.
Wise college students will sign up for a student credit card soon after arriving at college or university, get a low maximum balance, use the college credit card only when it's necessary -- *and* pay off bills every month. This helps establish a good line of credit, an essential piece of every college student's future financial success once he or she graduates.
Many college student credit card companies offer high interest rates (around 18%) which is massive, and should make any student want to pay off their monthly bills as fast as possible.
Some college students master the art of buying stuff on credit and not paying for 60-90 days. Depending on how fast or slow the merchant places the credit receipt into their system it can be longer. Essentially, this is one way of getting an interest free student loan. Many college students pursue this strategy at their own peril, however.
Other college students will sign up for a student credit card and us it to purchase everything that strikes their fancy. When the limit is reached on one college credit card, the student then goes and signs up for a second and third and fourth "free" college credit card, only to max out those cards as well. This is extremely risky and not recommended.
Getting out of credit card debt is very difficult and no new college graduate wants to face the real world after graduation not only with student loans, but also credit card debt that's racking up faster than they can calculate.
A common college student credit card strategy is to simply pay the minimum monthly balance. While this is a common trend, it's not recommended because interest rates can be up to 20%. Why not just give all of your money to credit card companies now and get it over with! There are smarter ways to manage and save your money! Those college students who pay only monthly minimum balances on their student credit cards not only wind up paying hundreds or thousands of dollars in interest, but can also sometimes be assessed "over the limit" fees as well as get a negative mark on their credit report if a payment is missed. Bad. Bad. All bad.
Student credit cards can be excellent tools for college students who use them wisely, or who need them to get out of a one-time jam for purchasing something essential when there are absolutely no other sources of funds available, but knowing the dangers of student credit card debt and the repercussions of not making a monthly payment are essential for every college student *before* they sign up for their first credit card.
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