Use or Abuse?
Statistics indicate one-third of the college students have at least four credit cards.
The average credit card debt held by college graduates is $2,700.

Smart Credit Card Use is "Balancing" Act

Shopping with a credit card can be convenient, contemporary and carefree. But for some individuals, it can be costly—quite costly!

With a penchant for fun, socializing and indulgence, it can be easy for college students to fall into a spiral of spending that can leave them debt-ridden for years. 

While there are numerous risks associated with credit card abuse, there are benefits of smart credit card use. Students who are judicious in spending and promptly pay their accounts in full can build a good credit history.

Being a responsible credit card user favorably influences insurance agents, banks, mortgage companies and other lenders, as well as potential employers who may be reviewing credit scores when making hiring decisions.  

Experts suggest students ask themselves the following: 

Before Getting a Credit Card:

  • Do I need a credit card or would another option, such as a debit card, work just as well?
  • Do I have sufficient income that will enable me to promptly pay my bills?
  • Am I an impulse shopper who might be inclined to overextend myself financially?
  • Will the credit card be used for emergencies only or do I anticipate consistent and/or heavy expenditure usage?
  • Am I being enticed to get a particular credit card because I want advertised freebies and/or an immediate store discount?
  • Did I research options and comparison shop for low interest rates, introductory rates, no annual fees, low balance transfer fees, lenient grace periods and good rewards programs?
  • Did I read the fine print on the credit application?
  • If I already have a credit card, do I need another one?
  • If one of my credit cards has an ongoing balance, would it be adverse for me to open another account?

Using a Credit Card:

  • Do I promptly open and review my bill every month as a way to protect myself from incurring late fees, unauthorized charges and identity theft?
  • Am I careful about not lending my credit card to others and not revealing my number to anyone unless I've initiated the transaction with a reputable source?
  • Do I track my spending by frequently checking my account online, saving receipts and keeping records?
  • Am I careful about not overspending and not exceeding my credit limit, which can happen when a balance is high and interest charges and late payment fees tip the balance above the credit limit?
  • Have I ever gone on an unrestrained shopping spree and then considered reporting the card stolen as a way to avoid paying the charges, even though I knew this was illegal?
  • Am I aware of the signs of credit trouble, which include paying only the minimum balance, paying late and/or using cash reserves to pay living expenses?
  • For security purposes, do I have a record of the following in case my card is lost or stolen:  account number, issuer's name, phone number?
  • If my address changes, do I know to notify the card issuer immediately so that the account statement will be delivered promptly to the correct address and I can avoid incurring additional fees and interest payments?
  • Do I order a copy of my credit report annually to check for accuracy?

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