Plan Ahead. Get Ahead. > Managing Your Money > Managing Debt
A Different Kind of College Credit
When students head off to college, it's not unusual for them to find credit card applications stuffed into the bag when they buy their books. If they don't get the pitches then, offers are bound to arrive in their dorm mail or show up posted on bulletin boards.
Credit cards can be a big convenience for students, but they also can be a big headache. To head off expensive – and potentially credit-busting problems – encourage your student to follows these tips:
- Set a budget. Talk with your student about how much he or she will spend. Emphasize the importance of sticking to the budget to stay out of money trouble.
- Keep the limit low. Determine how much is needed to cover expenses. Refuse your card company's attempts to raise the credit limit.
- Use it sparingly. Resist the temptation to use the card for spur-of-the-moment purchases.
- Pay on time. Paying off balances not only saves on interest but builds a solid credit history.
- Avoid cash advances. These can involve an up-front fee plus interest that starts accruing immediately.
- Keep tabs on cards. To avoid identity theft, don't leave credit cards – or statements that show a credit card account number – lying around.
Take the next step...
Consider consolidating your debts. Check out this debt consolidation calculator.
