Credit Cards and the College Student
Credit cards are an almost necessary evil in the world in which we live. They are needed for some very basic functions on occasion but also for help in times of emergency when cash is low. The average Penn State student needs at least one credit card not only for the safety net they can provide but also for the important learning tool they can be. Responsible spending is the key when it comes to credit cards. Unfortunately the temptation to buy now and pay later often proves too much for many college students who apply for one card after another accruing massive debt before careers have begun.
Establishing Responsible Spending Practices
For most Penn State students, this marks the first time for personal financial responsibility. There are no parents to call when a tank of gas is needed or food is in short supply—or the parents are far enough away that immediate satisfaction is often not even a remote possibility. Credit cards in moments like this offer a vital safety net. The problem is that these cards are often misused, abused, and maxxed out before the plastic has had time to put a dent in wallets. Learning responsible spending habits is a great way to avoid that.
How to be Responsible with Credit Cards
By using credit cards for only emergencies and paying off the bulk of the balance each month rather than the minimum payment two things can be accomplished. First, a pattern is established of spending and paying down the card month after month. Second, a pattern of responsible spending is being noted by credit reporting agencies that score credit and establish the credit value of spenders. Another thing is happening though that is possibly even more important. The spender is learning to think of the credit card as a tool rather than a meal ticket.
Other Responsible Spending Habits
There are many ways in which a person can prove to have responsible spending habits. Not the least of these ways is by refraining from the temptation to apply for multiple credit cards. As a positive spending record is established with a first card, the offers will come pouring in. The thing that must be remembered however is that these offers come with a rather hefty price tag—some as much as 20% or more on the purchases you make now. The problem is that the average college student simply cannot afford the debt that is being built and enters the workforce as a slave to credit card debt. Do not allow this to happen and the benefits will far outweigh the sacrifice.
How bad is Credit Card Spending Among Penn State Students?
The problem is actually so bad that many states are actually passing laws against predatory solicitation efforts by credit card companies on college campuses in several states. Far too often company after company solicits young college students who are facing financial responsibility for the first time in their lives and essentially prey on that ignorance as to how the financial world operates. The good news in all of this is that many colleges are making massive efforts to offer free educational seminars concerning the fall out of excessive credit card and student loan debt as well as how to establish responsible spending habits that will serve students not only in college but also as they enter the professional world beyond college.
Responsible Spending without Crimping the Plastic
The secret to success when it comes to credit cards is much like the secret to successful dieting—elusive. Seriously, the best advice in both cases is to learn moderation. Chances are that a college student will at some time use a credit card for something other than a stark emergency or at the very least will try to turn a non-emergency moment into an emergency in order to appease a guilty conscious. Do not let a one-time event turn the tide in the direction of a future with a complete lack of responsible spending practices. Credit cards can be a significant temptation they can also be valuable positive learning tools.