Credit
Credit Cards and College Students
By Jason Cunningham
Feb 23, 2008 - 5:12:50 AM

If you walk on the average college campus or university, at the beginning of the fall semester, as a college student, you will be presented with many credit card offers. Some institutions allow representatives from various credit card companies to be present on campus, while others grant permission for these companies to solicit in packets of information given to the students.

It is difficult to establish a credit history, if you decide not to apply for credit. For example, I never had a credit card in college and lived on campus. Upon leaving college, I discovered that every utility and cell phone company wanted a deposit from me. How could this be? If you never prove to any company that you can pay your bill on time, then why should they grant you credit? Fortunately, my late father had co-signed my student loan , and when I began to make payments, this helped to establish my credit history, along with paying my utilities. Therefore, as a college student, you might consider applying for a credit card, in order to establish a credit history before receiving a degree and working full-time in the job world.

When shopping for a credit card, you need to consider more than just the credit limit available to you. What are the yearly fees associated with the credit card? If you do not pay off the balance in full, how does the credit card company apply finances charges to your account. You also should understand the different methods of calculating finances charges, when you are unable to pay off the current credit card statement’s balance by its due date. For example, some credit card companies charge you interest based on the previous month’s balance, while others consider any payments you made during the billing cycle and then apply finance charges to the remaining amount due.

You should not think of a credit card as free money. The card issuer is actually loaning you an amount of credit. Therefore, the company wants its money by the due date. Some credit card issuers allow you to make payments online, over the phone (may be a charge) or by check or money order. Keep in mind, some companies will require the payment by a certain date, if you are paying online; it may be three or four days before the due date. Otherwise, you might pay a processing fee for your payment to post by the statement due date. The consequences of not paying your credit card bill can be detrimental. The amount of fees can rack up.

Do not go over your credit card spending limit. This can turn into a nightmare. You could be hit with penalties and fees that might end up being equal to or greater than the purchase itself. If you are unsure of your credit card balance, most credit card companies allow you to view it online or you can call customer service.

A credit card can be used to establish your credit history. However, remember that the credit card company is placing a loan in front of you. Yet, if you use your credit wisely, this may limit the amount of deposits that you will be required to make, when you rent an apartment and or ask for an utility company to turn on the lights or water. On a monthly basis, it is a good idea to pay the full amount of your credit card bill. You do not want to get into the habit of paying finance charges. But more importantly, find a credit card that is right for you.