College Connect: Credit Cards: What To Know and Watch Out For

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By Alex Ring

With the laundry list of other responsibilities that flood into the life of a college student credit cards can be a double-edged sword that solidifies adulthood and can pave the way for future but it should not be taken lightly.

Credit cards play to one of the most important needs of a consumer, convenience. The basis for credit cards originated in the early 1900’s and resembled military dog tags with your name and information on it that would be accepted in immediate transactions but would later be processed and billed. The convenience of a credit card is unmatched and allows for consumers to obtain something now and pay later no matter the size of purchase. This is the best and the most risky aspect of a credit card because if you are late with these payments extra fees arise and interest rates are already taking a tole on the original amount. Lets start from square one and map out the process of getting a credit card and maintaining good credit.

There are two main credit processing companies: Mastercard and Visa. In order to get access to these special plastic cards, you must apply. Like an application to college you must have some preliminary preparations in place to increase your chances of being accepted. If you are under 21 the federal government requires a verifiable income to be in place or else you must have someone else cosign which would make a joint credit card.

Independence in this area would be personally preferred and in that case I would also need to take care of the other biggest factor: credit history. This is a detailed record of all of my financial accounts that are active and is a check on a consumer’s financial responsibility. If you are like me, you are in a situation where prior credit is not even in consideration and so you have nothing for a credit card company to check.

If you have no credit basis you can find student credit cards. In the world of finances, credit cards are no exception to the realities of fees and interest rates. Student credit cards sometimes come with high interest rates and fees which may make it a costly first credit card. If you are in good standings with your bank you can apply for a credit card through them and your banking history can vouch for you.

Once you are approved, the biggest problem moving forward for everyone is maintaining good credit. Bad credit is seen as a risk to creditors and you can feel the consequences of bad credit heavily. It can stay on your record for 7 years and during that time it is harder to receive loans, increases rates on credit cards, can be a factor to employers, lead to a higher insurance premium and so on. On the flip side you generate good credit through on time payments and proper financial responsibility like not exceeding credit limits or number of cards. It is best to start slow and when starting out on a new credit card only making a few small purchases and paying them back full to ensure good credit from the start.

There are many different types of credit cards to match different living situations. There are business credit cards that offer reward promotions like airline miles and separation of personal and business expenses. There are also credit cards in place to restore good credit as well as promotional credit cards that reward the card user by giving cash back, points back on gas and hotel points. The standard credit card will fit the needs of most college students and so the focus should stay on keeping good credit and staying out of debt because according to the wall street journal Americans are expected to reach a combined 1 trillion dollars in credit card debt this year.

Alex Ring is a sophomore at the University of Missouri, studying journalism.

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