Students Credit Card Warning

Beware - Don’t Fail With Credit Cards

“Easy come, easy go.” That’s the way many students treat credit cards.  Credit cards are easy to get. You can apply online and get instant approval for credit. The problem is, it’s not “easy go” at payment time when there’s not enough money left to meet the minimum payment.  Your debt piles up faster than dirty clothes in a dorm room.

Then you hear an amazing solution – “balance transfer.”  It sounds like a way out.  Just get a second, third or fourth credit card with that introductory zero percent interest rate and transfer your debt balance.

Then you do it again - and again. This is just shuffling debt and prolonging the inevitable crash.  If you aren’t good at managing credit card use, the last thing you need is a wallet full of cards.  In no time, your so-called debt management strategy of multiple credit card explodes into more debt than you can afford.

Here’s another frequent misuse of credit cards – the cash advance.  Remember when you begged for money from your parents hoping that they wouldn’t check out your sob story? This is an electronic handout with no lectures.

Just insert your credit card and out comes the cash – no questions asked.  Since ATMs are located everywhere you want to go, it’s easy to get money.  Instead of leaving the party when your cash runs out, just find an ATM and get more cash.

The cash advance is the most convenient and the most devastating feature of student credit cards. If you’re in a pinch and really need cash, it’s a great option. But it’s more often used for “wants” than “needs.”

That electronic money machine is basically giving you a loan at high rates of interest. On a typical Saturday, you can hit the ATM to cover $10 for lunch, $55 for a fantastic jacket that’s on sale and another $35 to pay the pizza delivery guy for food.

That’s $100 from cash advances in just one day!  If you do that once a week, you pile up $400 in debt on your credit card. On some cards, cash advances are subject to a higher interest rate - so the debt quickly become overwhelming.

Did you ever notice as the school year drags on how your friends get low on money?  If you could just pay for the next round, they’ll pay you back after the next paycheck. So you put it on your credit card and wait to get repaid.

Meanwhile, your monthly credit card bill is due and the company doesn’t care that your deadbeat friends haven’t repaid you yet. The balance due is in your name and it’s your problem.

Credit card mistakes are neither forgiven nor forgotten. Late payments, charging over your limit and shuffling money around cards to pay what you really can’t afford buys you nothing more than a trashed credit rating.

You may not care now, but you’ll care when you can’t buy a car, a home or another major purchase because your credit rating is too low for you to get approved.  Think about that the next time a group says, “Hey, can you just charge this round until I get my paycheck?”