Published on http://www.aggietownsquare.com on September 2, 2009
At the beginning of my freshman year, I stepped into the big, scary world of credit by applying for a Discover student credit card. Two years later, turns out it's not that scary. Having a credit card has been useful when making expensive purchases, and I've received small cash rebates for using my card at designated retail locations. Having a credit card also developed and improved my credit so I could take out a small loan on my first car this past summer. But, a credit card can turn into a grizzly beast if you don't play by its rules. High interest rates can make carrying a balance on a credit card incredibly expensive.
To learn more about how credit cards affect students I met with Steve Sharp, the director of the USU Financial Aid Office. After meeting with Sharp and doing a little research on my own, I came up with five rules of the road to keeping credit cards on your side of the credit battle. Here we go:
1. Pay the balance in full each month.
Credit cards are handy in that they "buy" you time to pay for a charge, but after the 30-day period they're not so friendly. If you don't pay your credit card balance in full each month you are assessed the highest interest fee for any kind of credit. As Sharp put it, "It's like buying something full price plus 25 percent." So, don't be tempted by the low minimum payment, pay the balance in full.
2. Track your charges.
Treat your credit card like a debit card or checking account. Keep track of what you're spending or you'll be surprised at how much you used the card, often on impulse purchases, when you receive your statement. Keep your receipts and check your balance online often. If you have a difficult time tracking what you spend, Sharp recommended trying out a debit card first, which forces you to keep track of your purchases.
3. You only need one.
Multiple credit cards can be difficult to handle and manage. It's easy to start forgetting about multiple charges and balances on multiple cards. More cards also mean more temptation; you have much more money to spend on impulse purchases. Sharp also pointed out that multiple cards actually hurt your credit score.
4. Carefully get rid of applications.
Once you have one credit card, get rid of applications for any more. Destroy, don't just throw away, applications you receive. By destroying them, you reduce the risk of identity theft.
5. Pick the right one.
Choose a credit card with low interest, low or no annual fees, a long grace period, a low credit limit, wide acceptance (not all credit card brands are accepted everywhere) and useful services and features (like cash rebates or frequent flyer miles). Many credit card Web sites offer selection tools to help you decide which of their cards will work best for you. Like I mentioned earlier, I've been very happy with my Discover student card and have found the customer service to be very helpful.
Another interesting suggestion Sharp made was to pay tuition straight from your checking account to avoid the fee assessed by the university for using a credit card. Sharp also strongly recommends that if you need a loan to pay for school that you NOT "borrow" money by paying with your credit card and leaving it as a balance.
"Sometimes it makes sense to get a loan for education, but even the worst federal student loan is better than a credit card," Sharp said.
High interest rates from credit cards result in you paying way too much. Sharp suggested to instead apply for federal financial aid and receive a student loan, and there's even still time to qualify for a loan this semester and year. Sharp said student loans can be applied for and accepted before the semester they are used for ends. See the Financial Aid Office in the basement of the Taggart Student Center for more information.
As an interesting side-note, Sharp shared some statistics about credit card use on campus. According to a survey conducted last year among USU students who received financial aid, Sharp said two-thirds of them said they had credits cards. Of those students, one-third said they had credit cards but paid the balance in full each month and one-fourth said they carried a balance each month. Of all students surveyed, 11 percent had three or more credit cards.
Do you think these statistics accurately reflect credit card use at Utah State University? As a student, what recommendations would you give about credit cards? Have a good or bad experience you'd like to share? Please comment below. I appreciate your input and discussion.
Sources: http://www.mappingyourfuture.org/money/creditcards.htm.
Each week I'll be sharing a tip or bargain of the week – ways to save money or make the most out of it. Got an idea or heard about a discount? Please comment below or send me an e-mail.
Bargain of the Week: Join HURD, the student spirit club. For the $25 annual fee you receive a T-shirt, discounts from the HURD card, priority when purchasing tickets to away games and tournaments, and (my favorite part) free dinners once a week at the Coaches Show. Join HURD, the largest student club on campus, in the Student Involvement Office on the third floor of the TSC.
Karlie Brand is a junior in public relations. "Watching Your Wallet" will appear online each Wednesday. Questions or comments can be sent to her at karlie.brand@aggiemail.usu.edu
Another interesting suggestion Sharp made was to pay tuition straight from your checking account to avoid the fee assessed by the university for using a credit card. Sharp also strongly recommends that if you need a loan to pay for school that you NOT "borrow" money by paying with your credit card and leaving it as a balance.
"Sometimes it makes sense to get a loan for education, but even the worst federal student loan is better than a credit card," Sharp said.
High interest rates from credit cards result in you paying way too much. Sharp suggested to instead apply for federal financial aid and receive a student loan, and there's even still time to qualify for a loan this semester and year. Sharp said student loans can be applied for and accepted before the semester they are used for ends. See the Financial Aid Office in the basement of the Taggart Student Center for more information.
As an interesting side-note, Sharp shared some statistics about credit card use on campus. According to a survey conducted last year among USU students who received financial aid, Sharp said two-thirds of them said they had credits cards. Of those students, one-third said they had credit cards but paid the balance in full each month and one-fourth said they carried a balance each month. Of all students surveyed, 11 percent had three or more credit cards.
Do you think these statistics accurately reflect credit card use at Utah State University? As a student, what recommendations would you give about credit cards? Have a good or bad experience you'd like to share? Please comment below. I appreciate your input and discussion.
Sources: http://www.mappingyourfuture.org/money/creditcards.htm.
Each week I'll be sharing a tip or bargain of the week – ways to save money or make the most out of it. Got an idea or heard about a discount? Please comment below or send me an e-mail.
Bargain of the Week: Join HURD, the student spirit club. For the $25 annual fee you receive a T-shirt, discounts from the HURD card, priority when purchasing tickets to away games and tournaments, and (my favorite part) free dinners once a week at the Coaches Show. Join HURD, the largest student club on campus, in the Student Involvement Office on the third floor of the TSC.
Karlie Brand is a junior in public relations. "Watching Your Wallet" will appear online each Wednesday. Questions or comments can be sent to her at karlie.brand@aggiemail.usu.edu
No comments:
Post a Comment