According to Nellie Mae, 56% of undergraduates get their first card at age 18 and 91% of final year students have a credit card. 56% of final year students carry four or more cards. The average outstanding balance on undergraduate credit cards was $2,169.
As parents you have to teach your children how to use a credit card. Credit card companies are waiting for your students to go to college and get in debt. If you don't teach them about proper credit card use they will end up in debt and it will take them years after getting a full-time job to pay the debt off.
The credit cards that are promoted with on-campus are the worst credit cards students can get. You have to do research to find the credit card with the best interest rate and terms. Visit websites such as bankrate.com or creditcards.com to comparison shop.
Here are some tips to help college students when selecting a credit card:
1. Explain how credit cards work, the advantages and disadvantages and all the fees associated with credit cards such as: interest rate, minimum payment, grace period, and the finance charges, late fees, etc.
2. Talk to your children about who will pay the credit card. Many times students assume their parents will pay the bill. Discuss this before your child goes to college to manage expectations.
3. Offer assistance to help your child compare credit card offers or talk to your local bank officer who can help you review terms and conditions and compare rates.
Here are 5 to help prevent overspending on credit cards:
1. Pay off your balance each month.
2. Keep track of your credit limit.
3. Use for emergencies only.
4. Know your payment due date.
5. Do not get cash advances.
Parents you can also write your state congressman and representative to complain about credit card interest rates and marketing practices used on college students.
No comments:
Post a Comment