Student Credit Cards: Graduating Debt Free
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by: barrywaters
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Word Count: 488
Youve just gotten your brand new student credit card in the mail, and its all yours! It gives you all kinds of reasons to take it right out to the stores and start spending: gas rebates, a points system that gives you free checks in the mail, even cask back when you use the card at the right stores. Isnt it great to have a brand new card? Why not use student credit cards right away?
Before you put any new student credit cards through their paces, think twice. In New York state, the average college student emerges from school with four credit cards and $3,173 in credit card debt. Thats on top of any tuition debt they may be carrying, and is likely to have an interest rate higher than the national average. Its a heavy load of debt to carry when youre new to the full time workforce and still looking for a job in your field. And its an easy burden to pick up. $3,173 is barely $793 a year. Thats $66 a month or $15.25 a week. Spend one evening at the bar, or buy a few CDs, or charge a couple of your books for the semester, and youve added that much to the debt youll be working for years to pay off.
How can you avoid this? Use your student credit cards wisely. Use these rules as a guide:
* Dont carry a balance from month to month. You do need to use your credit card to build your credit history. You dont need to carry a balance.
* Charge only the essentials. Its easy to think of credit as fun money, but you have to pay for all those extra treats eventually. Charge only when you truly need an item and you know youll be able to pay it off shortly.
* Dont let the promise of rebates or points sway you to charge more. The money youll pay in interest exceeds the money the credit card issuer will give you as part of the reward program. (Thats why credit card companies make money on rewards programs.)
* Avoid extra fees by paying your credit card bills on time every month. Between the average late fee of $35 and the way credit card companies jack up your interest rate when you miss payments, you can accrue hefty extra debt just by not paying on time. Dont start down that spiral! If remembering to pay your bills on time is a problem, set up automatic payments at your bank. Theyre a credit saver.
Be careful with your student credit cards, and youll graduate with no debt and excellent credit. Youll find it infinitely easier when you buy a house, rent an apartment, and establish yourself in the world outside college.
About the Author
See more about student credit cards, see us at www.getsmart.com/credit-cards.
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