Credit cards and college students are a dangerous combination.
And with the start of college just days away, there's still time for a quick primer course.
“A large share of students get their first credit cards in college,” says Dr. James Roberts a marketing professor at Baylor University. “They put them in the back of their mind and don’t pay off their balances: It ultimately leads to financial problems in the future.”
Now put this in your notebook because you may be tested on it in life.
Fifty-six percent of college students carry four or more cards, according to Nellie Mae, a student financial aid firm. By senior year, nine out of ten have at least one. The average outstanding balance is $2,864.
Graduating with credit card debt or missing payments can have a negative impact following graduating, affecting your credit worthiness and even job opportunities.
“If you do screw up your credit," says Emily Davidson a financial expert at Credit.com, "it’s going to haunt you for years.”
Given those dire consequences, we've assembled these tips to help parents and students stay out of credit card debt.
As with most money matters, frank discussion often leads to understanding and agreement and this is one case where parents need to take the initiative in educating their children.
"In our culture parents are more likely to educate about the dangers of cigarettes and neglect to warn about the danger of credit cards," says former financial planner Eric Tyson, author of "Personal Finance for Dummies."
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