Give Your Student a Higher Education in Credit Cards
Posted: August 20, 2015
by Center for Personal Finance editors
Your student might be vulnerable to financial trouble if you don't talk to him or her about credit cards. Without any knowledge of how credit works, your student could easily sign up for a bad deal just to get a free T-shirt.
Make these messages loud and clear to students before letting them fly the nest:
- Swiping your card has consequences. As easy as one swipe is, credit is not free. At the end of the month you'll literally have to pay the price of excessive impulse buying.
- Comparison shop before committing. Look for providers that have low interest rates or finance charges and low or no annual fees. Your credit union is a great place to get a good deal.
- Limit yourself from the get-go. There is no reason that a student should have a credit limit that exceeds $1,000.
- Use credit cards for emergencies only. And no—finding the last pair of cute shoes in your size does not constitute an emergency.
- Watch your balance. It's important to pay your bill in full every month in order to maintain a good credit score. Make sure you don't charge too much on your card in any given month.
- Bad credit will affect your future. If you don't use your credit card responsibly, you might not get insurance, a loan, an apartment, or even a job.
Published August 14, 2015
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