Why Credit Card Companies Target College Students

Many credit card companies see the marketing potential in college students. Credit card companies use promotional offers and free gifts like t-shirts, coffee mugs, or CDs to entice students on signing up for their company.

Have you ever asked why? Loyalty is a good reason. Credit card companies are competing to be the first credit card that the student will own. By being their first credit card, it is very likely that even when they graduate from college and enter the corporate world, students will be upgrading their credit cards with the same credit card company.

Students are Big Spenders

Aside from this, college students are great spenders. Let’s face it, credit card companies love customers who spend much using their credit cards. The more a person uses his credit card, the better it is for the business. And students are usually prone to over spending or using their credit cards excessively not just for their school necessities but on luxuries as well.

Despite the fact that college students are still in school and most do not have stable jobs to finance them, credit card companies are still doing everything to encourage these students on obtaining a student credit cards. Furthermore, credit card companies are encouraging students to use their credit cards as often as they can.

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Student Credit Card Mistakes

Students are prone to get caught in credit card debt. Let’s take a closer look at the following mistakes that students make with their student credit cards.

Signing up for the first student credit card offer

As you enter college, you might receive a lot of credit card offers from different credit card issuers.

If you’re not going to think about it carefully, you might just sign up for the first offer that you think sounds good enough for a credit card. It’s easy to get one enticed by a credit card offer. Most credit card companies make a lot of exciting promotions that may be hard to resist. However, if you’ll read the complete terms and conditions, you might be surprised to see that there are certain charges that are higher than expected.

To Sign or Not to Sign

To avoid signing up for the wrong credit card offer, don’t just read the best features of the credit card. Take the time to read the terms and conditions which can be found in the credit card’s website. This way, you’ll get to know about all the rates and charges that come with your credit card. Check out websites that give credit card reviews on different credit cards for students. These websites compile all possible student credit cards in the market, along with their main features in just one page. This will help you see what choices you have and compare them.

In addition, since this is your first time applying for a credit card, it will be better if you seek advice from your family or relatives who may know more about credit cards than you do. Better, you may seek assistance from a financial consultant who can give you an objective and informed opinion about the best student credit card.

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Credit Cards and Students

If you are a student thinking about applying for a credit card, you are preparing to establish a credit record of your own. It is a good idea to start early. Whether in high school with a debit visa or mastercard that reports to the credit bureaus, or college, since a credit card will be essential once you’ve graduated. Setting up a respectable credit history is a good foundation which can help you tremendously later in life. Aside from banks, companies, landlords, and firms generally judge your credentials based on your credit rating.

What to look for in a good student credit card

It is important though to choose the right credit card that will work best for you. Do your research. Study everything the credit card offers. Consider how much the annual fees are, APR (annual interest rates), and penalty fees if you fail to pay your bill in time. Make sure that the credit card provides a grace period or else the interest you will be immediately charge right after you made the purchase. Be careful about signing up for a credit card just because of great introductory rate being offered. Make sure that this introductory period lasts long and not just catch to lure customers. Why not consider credit cards by credit unions accessible from the campus. They usually have practicable rates and fees.

Once you’ve decided on the best student credit card for you, your main goal is to be able to pay off your balances timely and avoid any interest build-up. Below are good recommendations to practice to help you stay out of debt:

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How To Avoid Being Trapped in Student Credit Card Debt

College students graduate with two types of debts on their hands- student loan and credit card debt. If you are a student, how can you avoid getting stuck in debt, particularly student credit card debt? How can you make the most out of your student credit card without putting yourself in debt trouble? Here are some tips:

Use your student credit card with care. Your student credit card is supposed to provide assistance with your studies. Unfortunately, many students abuse the ease and convenience of paying with student credit cards which results to debt problems. Remember that each time you charge something to your student credit card, it is your duty to pay it back on time.

Not submitting your credit card payments on time or in full can cause you to incur high interest fees and late penalty charges. Therefore, before using your student credit card, ask yourself, “Is this purchase or expense really important for my studies?”. “Will I be able to pay it back in full before my due date ends?”

Get a part time job to cover for your personal expenses. Some students get a part time job while in college earn extra money to help them with their studies. A part time job also enables these students to pay off their student loans even while studying. This way, they wouldn’t be in so much debt when they graduate college.

Budget your monthly expenses. Even if you have a student loan and a student credit card to help you with your expenses, it is only wise to create a monthly budget plan and stick with it. How much do you need to spend for the whole month both for your studies and personal needs? If you have limited cash, you may need to make adjustments on your lifestyle instead of charging everything to your student credit card.

Don’t wait for things to go from worse to worst. If you notice that you’re having a difficult time budgeting your money and keeping up with your debts, don’t be afraid to get help. Seek advice from a legitimate credit counseling agency. A credit counselor should be able to help you manage your money efficiently and overcome debt problems.

Nevertheless, it’s important to make sure that you’re seeking help from the right credit counseling agency. Some credit counseling services may offer you false help or unnecessary advices that can worsen your debt problems.

Pay your student credit card balance in full each month. You may be tempted to pay only the minimum payment on your student credit card but this also means incurring high interest rates and would take you a longer time to complete your payments.

Paying off your credit card balance completely each month is crucial in overcoming and staying away from debt. This habit protects you from additional interest rate charges and late penalty fees. It also minimizes the risk of building up debts in your account. More importantly, it keeps your credit score and credit history in excellent standing.

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How a Student can Stay Away from Student Credit Card Debt

Having a credit card makes sometimes a students becomes irresponsible and get trap from debt. Find out how to avoid and be prepared through this article.

As a college student, you may agree that life is not easy all the time. Aside from the challenges of dealing with peers and professors, passing exams, and keeping up with the daily school activities, financial issues can also add to the pressure. Many college students today find themselves confronted with the burden of debt on their shoulders.

According to surveys, students with bad credit all have one thing in common – unpaid student credit card debt. According to the Consolidated Credit Counseling Services Inc. 40% of college students get at least one student credit card on their freshmen year, while 20% apply for student credit cards while they’re in still high school.

True, getting approved for a student credit card is fairly easy and owning a student credit card does have its advantages. Unfortunately, most students with credit cards don’t know how to handle their student credit cards correctly. A study conducted by Nellie Mae, a leading student loan lending company, reveals that in 2001, 83% of undergraduate students own a credit card- each with existing balances that amount to $2,327 on average. Imagine how difficult it could be for a student to pay off a credit card balance of $2,000 in full.

Surviving Student Credit Card Debt

Are you a student yourself? The best thing to do to avoid student credit card debt is to handle your student credit card with caution. Financial experts agree that student credit cards can be a great tool in building your credit history. But don’t let the convenience of a student credit card lead you to overspending and eventually, bad debt.

What every student must realize is that each time they use their student credit card for a purchase or for a charge, he or she has the obligation to pay it back on time. Other students may reason out that they have the option to pay only the minimum payment required and carry over their balance for the next billing period. But such reasoning can easily lead to unmanageable debt. Remember, if you carry over your balance from month to month, you incur the high interest rate charges and you increase the risk of building up debts in your account. That is why, all credit card holders – not only students – are advised to pay off their monthly balances in full at all times.

Parents also play a big role in helping young people understand their obligations as new credit card holders. In choosing a student credit card, you can work with your teen-ager and guide them with their choice. You may share your own experiences as a credit card owner as well. You may also recommend a particular student credit card that you think offers the better deal. Encourage your kids to read the credit card’s Terms and Conditions in full so that they can personally understand what they’re signing up for. Emphasize the importance of building a credit history. Teach your kids how they can take care of their credit and keep it in a good or excellent status.

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