There has been and still is an on-going campaign by companies to aggressively market credit cards on college campuses. The methods used to entice students to apply for credit cards may include free items and other coercive tactics.
Studies show that over 50% of 18-year-old college students obtain a credit card for the first time and that more than 70% actually own one credit card with a balance of more than $2000.
This is a credit card trap that requires a student to ask some very hard questions before signing on the dotted line.
* Do I need a credit card?
* Can I afford a credit card?
* How will I use the credit card?
* Will I be able to make the payments each month?
For most college students, the answers may determine whether or not they are willing and able to take on this added responsibility.
In order to avoid this trap, college students should investigate different credit card companies and consider the following:
* What is the APR rate?
* Does the card carry an annual fee?
* What is the default interest rate?
* What are the policies as it relates to Change in Terms?
* Does the card carry a Universal Default clause?
After they have researched the terms and conditions thoroughly, then and only then should they make the decision whether or not it is worth it to apply. Once the card is received, it is important to use the card wisely. This requires that the student:
* Pay off the balance each month
* Do not exceed the credit card limit
* Avoid cash advances
* Keep track of purchases and payments
