Smart Borrower Center
Tools to help you borrow better
Going off to college can be one of the most vulnerable times in your life. You may leave your hometown, and subsequently, your circle of friends and family. When you start college you may find that you have access to considerably less money than you are used to, especially if this if your first time living away from home. You may also find that your new social life involves events that require you to spend money to participate. On top of that, credit card companies often start sending you information about cards and deals that sound too good to be true once you turn 18. Because of that, you need to be an informed consumer and figure out when and if getting a credit card is right for you.
If you’re thinking about getting a credit card in college, one of the first things you need to do is look at your monthly income. If you are not working while in college, getting a credit card may not be the best idea. But if you are working and you make a serious commitment to yourself not to spend more money than you make, getting a credit card can be a good way to start building a credit history. Remember, the temptation of credit cards can be overwhelming, and although the card is plastic, you are spending real money that not only has to be repaid, but repaid with interest.
You may want to discuss getting a credit card with a professional at your bank or with a trusted and financially savvy family member. Some banks offer credit cards with low limits so that you can get used to using it and paying it off, without the ability to go thousands of dollars in debt. You might also want to look into secured credit cards, which let you borrow up to an amount which you have deposited as security.
Remember, you went to college to get a degree and prepare yourself for a career. You should have an honest conversation with yourself about your income and spending and determine if getting a credit card in college is right for you. It can be quite frustrating to start your financial life in the hole, so manage your credit properly and come out ahead.
Published on May 18, 2006