Teaching Students about Credit Security

A lot of college students are excited about acquiring their first credit cards. Despite the ease and convenience that credit card brings, it is very important to learn how to handle a student credit card properly. Reports show that a lot of college students graduate with unpaid debts on their account. They have used their first credit card without control and have put themselves in a difficult situation.

Credit Card Companies Pursue Students

It is interesting to note that some financial experts believe that credit card companies view students as a very lucrative market. Students have the tendency to spend more not only for their school necessities but for other things as well.

Regardless of the fact that college students do not have stable jobs to support them, credit card companies still pursue them as profitable customers. Why? Because even though they cannot pay their debts on a timely manner, credit card companies can still charge them with extra fees such as annual fees, penalties for late payment, penalties for exceeding credit limit, and higher interest rates.

You and your Credit Report

As a student, owning a student credit card does not have to be a bad thing. You can use it to your advantage if you know how to handle your credit card correctly. First of all, it is important to know that everything you do with your credit card will be reflected on your credit report. Transactions on your credit report will directly affect your credit score. For example, late payments or missing payments, exceeding credit limits will have a negative effect on your credit score. Thus, if you want to take care of your credit score, you need to watch out on how promptly you are in paying your balances.

Why should you be concerned whether you get a good credit score or not? Bear in mind that in almost everything you will do, people will be making a check on your background or your worthiness judging from your credit report. Once you graduated college, you will need to prove your worthiness or reputation by showing an excellent credit report. Landlords, employers, insurance companies, lending companies, credit card companies and government institutions will be taking a close look into your credit report before accepting your applications.

Keeping up with your Monthly Bills

Why Students Need Credit Cards

With this in mind, it is understandable why you as a student credit card holder should be concerned about paying your monthly balances timely. Of course, in order to avoid difficulties in keeping up with your payments, it is best to avoid unnecessary purchases that may result to an unreasonably large amount of credit. In short, use your student credit card only when it’s entirely necessary.

Financial experts advise that on making purchases, it is best to have a repayment plan prepared. Therefore, before you even make that purchase, you should already know how you’re going to pay for it or where you’re going to get the money to pay it back. Always submitting your payments on time does not only keep you from paying additional charges like late fees and interest, it also protects your credit reputation.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit cards articles that would help build student credit.
Copyright 2008

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