A Good Credit Score

A Good Credit Score

College Student Credit Cards

As any college parent can tell you, credit cards are a growing problem for college kids. As soon as they step on campus, credit card companies are beginning to target students with phone calls and enticing brochures. These credit companies understand that the compulsiveness of youth, coupled with the first burst of freedom is enough to help college students rack up some hefty bills with a credit card. Some parents allow their kids to get credit cards in an effort to build some credit and learn some responsibility. Other parents are worried that college student credit cards could be ruining their child’s credit for a long time.

The truth of the matter probably lies somewhere in the middle. There are a number of different credit cards and credit options that are being offered to students today. U.S. Bank’s breakdown of these offers can be found at the US Bank’s Consumer Credit Card Comparison. Parents are having the most trouble with the credit offers exceeding $1,000. Any amount under that is controllable, as students can use the card for emergencies and the occasional tank of gas to get home. Even the most outrageous use of that type of card won’t get the student into trouble. The trouble comes when a student applies for (and subsequently qualifies for) a credit card with a limit of $2,000.

Since most college students have relatively little credit history, it can be a good idea to get a credit card in order to build a good history of payments. Big limit credit cards offer too much of a risk, though. There is a lot of temptation out there for today’s college kids. From online gambling to the constant pressure of alcohol, plenty of things can eat up the balance on a credit card. Since most college students have little idea how quickly credit card debt can pile up, they don’t know to protect against irresponsible use.

For many of these college student credit cards, the interest rates are bordering upon outrageous. Low introductory rates draw students in, but within a few months, they are left paying 20% or more on the pizza that was purchase at 3 A.M. last Saturday night. That type of credit card use will get anyone in trouble, and college students are certainly more likely to be rambunctious in their purchases. This issue was addressed by Minnesota Attorney General Lori Swanson in a report that can be found at College Credit Cards.

In short, credit cards are a nice option for building credit, but only on a very small credit line. The majority of today’s students don’t have the maturity to handle a large line of credit and their surroundings don’t help much, either. With so much pressure and temptation to spend money each and every day, students are more likely than anyone else to run up a high balance on a high interest credit card. If that debt spirals out of control, students could be left with a bad credit rating and a high revolving balance by the time the damage is done.

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