A Back to School Primer on College
Credit Cards For Your College Student
Now
is the time to talk to your kids (sons, daughters, nieces,
nephews, or grandkids), about college credit cards. School
is around the corner, so please get busy. Pull up a chair,
sit down, grab your child, look him/her in the eyes and
start talking.
Here
are some humble suggestions for your conversation.
1. Start
with credit cards and end with credit cards. Once they
see the danger in credit cards all other budgeting matters
should fall into place.
2. Impart
the many evils of credit cards into their psyche by starting
with the potential for financial ruin if he or she doesn't
understand how credit card charges work, (especially how
college credit cards work). Don't forget to mention the
credit report, which will be of utmost importance when
they apply for everything from jobs to apartments after
college.
3. The
nuances of college credit cards are enough to ruin anyone's
college career. The interest rate is far in excess of the
average interest rate. College credit card interest rates
average 23%. That is bad, but the charges get even worse
with hidden cost. The hidden cost can insanely drive up
the balance and quadruple your child’s monthly payments.
The over-the-balance and missed payment penalties are atrocious
for credit cards. A $30 a month payment could quickly swell
to $300 with "missed payment" and "over-the-limit" fees
tacked on. Now you see why credit card companies are so
anxious to give out credit cards to young, over-spending,
credit-naive college students.
4. Most
college campuses do not allow credit card companies to
set-up tables on campus and sign up students anymore. Don't
think this has stopped them. Credit card companies have
managed to "mysteriously" get phone numbers and
addresses of college student, (I wonder how?), then they
ferociously contact them day after day to get that coveted
college credit card account. I should know, my niece used
our phone number and address as her permanent address when
she started college in our town. I received 4-5 calls PER
DAY, from 4-5 DIFFERENT credit card companies, all for
my niece. I'm glad they didn't have her dorm room number.
5. Now,
for the renegades. There will be a few of you who have
college students who will apply for a college credit card
just because you have counseled them not to. I recommend
you end the conversation as such, "if you ever get
a credit card, please be aware of all of the charges, get
ONLY one, and use it ONLY for emergencies. Remind them
that they don't want to pay ten times more than original
cost for everything they buy , this can easily happen with
credit card charges for underemployed college students.
6. Final
instructions, if you want to impart the highest level of
financial wisdom on your child, buy two copies of the book,
Let's Get Financial Savvy! From Debt-Free to Investing
With Ease, by Lois Center-Shabazz. You read one, and have
your child read one, discuss the book before or after he/she
starts school, it will save him/her from years of mistakes
and financial misery. Whenever your college student brings
up issues you can refer to the book.
So,
sit down, pull up a chair, look your college students in
the eyes, tell them how much you love them, and proceed
to impart the former words of wisdom.
by
Lois Center-Shabazz
The author of, Let's Get Financial Savvy!From Debt-Free to Investing With
Ease, winner 2002 Pinnacle Book Award,
Read More...
www.msfinancialsavvy.com
Buy
wherever books are sold, ISBN #0-9719795-0-2.
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