Finance Matters

The Federal law doesn’t provide any restrictions about issuing credit cards to minors. In fact, credit card companies consider teen-agers as a very profitable market. Most credit card companies often require a co-signer when a minor applies for a credit card. When a teen-ager reaches the age of 18, he has the right to sign-up for a credit card on his name even without a cosigner.

Are Student Credit Cards an Advantage?
Some parents feel that providing their kids with credit cards while they are still in high school help them learn about money early in life. With proper guidance and support, obtaining a student credit card can help young people learn about how to handle their finances properly.

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Credit Cards and High School Students

Surveys prove that many college students graduate with unpaid debts on their student loans which can amount to $20,000. Those who are still in college are faced with credit card debts amounting to $7,000 or even more. Even worse, there are many at a young age of 15-25 have already filed for bankruptcy. If you’re a student who owns a student credit card, these staggering surveys should definitely concern you. What can you do to avoid falling victim of bad credit?

Here are some valuable tips you can in your personal life as a student to help you manage your finances wisely.

Make a Commitment
Bad credit usually results from splurging or uncontrolled spending. In order to avoid paying for unreasonably high balances, as a student you should have the will to restrain yourself from spending on things that are not really necessary. Every time you plan on buying, ask yourself, “do I really need this or do I just want it?” If you know that you can get by without making that purchase then, have the will to back out.

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How Students Can Manage Their Student Credit Cards

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.

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Why Do Credit Card Companies Target College Students?

Students are prone to acquiring credit card debt. Why? Because most young people do not know or are not paying attention on how to handle their credit cards correctly. Here are some practical advice on the proper use of student credit cards and how to avoid credit card debt.

It’s Just a Marketing Strategy
Be aware that credit card companies are experts when it comes to marketing their business. They spend millions of dollars in using different marketing strategies to get your attention, to grab your interest and move you to sign up with their company. Credit card companies may give away freebies, offer instant approval, and other promotional tactics which can be very hard to resist. Don’t be too naïve in applying for a credit card just so you can get a free coffee mug or t-shirt. Remember, there’s more to it than just the freebie.

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Avoid Student Credit Card Debt

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.

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Student Credit Card Mistakes