The Role Credit Cards Play on Students

Studies on consumer credit card use reveal that a large percentage of credit card debt involves student cardholders. In response to the growing cases of bad credit and bankruptcy, schools and finance help groups aim to help students stay away from debt crisis through college credit education.

In survey conducted by Nellie Mae- a subsidiary of Sallie Mae, the nation’s leading student loan company, graduating student carry an average balance of $8,612 on their credit card accounts and half of this month is the average balance incurred by undergraduates.

Finance help experts put the blame on student credit card issuers since they are the ones who encourage young people to get more than one student credit card using smart marketing tactics. Read newspapers and magazine, surf the internet, watch television, and listen to radio broadcasts and notice how credit card companies use cunning advertisements to entice young people to sign up for a credit card.

Important Points to Ponder on your First Credit Card for Students

If you are a student, are you thinking about signing up for your own student credit card? If you already have one, do you still have plans to open another credit card account? Are you enticed to sign up for a new credit card because of the seemingly attractive offers? Do you think that you are prepared to manage a student credit card account or multiple accounts?

In a 2008 survey done by The Hartford Financial Services Group, 55% of parents reveal that their doubts as to whether young people (from ages 15-24) can really own up to financial independence. It is interesting to compare another survey by The Jump$tart Coalition for Financial Literary which proves that 48.3% of young people answered incorrectly on questions about fundamental personal finance skills.

Nowadays, classes on personal finance management are conducted in many universities and colleges in the hopes to help students avoid credit card debt and develop efficient skills in dealing with money matters. On January 2008, the National Endowment for Financial Education (NEFE) introduced an online course on financial management training which is called CashCourse. This online course is offered in 126 universities.

Learning Credit Card Terminologies

Every credit card holder must learn how credit cards really work and today, lessons on credit card terminologies included in a regular math class. When you read the fine print, it is crucial that you understand the meaning or implications of the specific terms such as interest rates, APR, transaction fees, repayment terms, closing costs, late penalty, pre-payment penalty, credit report, FICO score etc.

Understanding the basic terminologies is the key to making a smart credit card choice. If you know exactly how the costs are calculated, you can weigh your choices more efficiently, rather than just pick a credit that seems to offer a good deal.

Parents can also play a big role in helping teens and college students get out of bad debt. As a parent, you can share your personal tips on how to handle credit cards effectively. Guide your kids in looking for the right student credit card in the market or make recommendations based on your personal experience.

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 2009
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