Credit Caution: Welcoming Teens Into The World Of Credit Cards
Parents worry about whether or not their teenager or college student should have a credit card. With the rising levels of bankruptcies and deep in debt young people, they have a right to be concerned. But student credit cards are now available that set very low spending limits, can be co-signed for and a variety of other options. Students are faced with the dilemma or whether or not they should get a credit card, as well, because you need a good credit rating in order to get a home loan, but it's hard to be responsible with a card you can charge to whenever. Student credit cards anticipate this sort of problem, and help teenagers and college students make responsible choices when it comes to their credit. In order to really learn about credit, parents need to step up and provide the lessons. With life-experience and probably plenty of credit mistakes to learn from, parents have to teach their kids about all forms of credit and how to handle money. Typically, the downward spiral into debt occurs sometime in college. With this being a kid's first real time away from home, they express their freedom through charging everything imaginable to their credit card, overspending and racking up a mountain of a balance. It is important for teens and college students to establish good credit while in college. Parents are still available in case something horrible happens and they need assistance, but students shouldn't rely on that fact. Student credit cards make it so students can build up a good credit report, without falling into debt or worse yet, bankruptcy in their early twenties. So what are some ways to maintain a good credit report with your student credit card? Pay off the outstanding balance every month. If this isn't possible, always pay over the minimum amount due. To do otherwise, would be to have an interest rate that racks up a total equal to your balance! Don't rely on parents to bail you out of financial troubles. Be responsible in your credit decisions and use of your student credit card. Keep your balance low. With the cost of rent, car loans, student loans and other necessities, you can't afford to have more debt in the form of a student credit card. Building up good credit in college through the use of a student credit card is one of the smartest things you can do. It's nearly impossible to have anyone take a chance on you after college graduation. The thinking is, you don't have your parents backing you up anymore and you have tons of student loans to pay off. Creditors simply think you won't have the money to pay for a credit card. Student credit cards are truly a unique opportunity for young people, that when used correctly, can lead to a great start down the road to owning a home and more!
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