Graphic design major, Matt Hind, got his first credit card two months ago and he’s not afraid to use it – for just about any and everything.
“Buy now, pay later” is Hind’s philosophy. “I use my credit card to avoid using my cash,” the 23-year-old Winston-Salem native said. “Students should have two or three credit cards, one to pay for the first credit card you receive.”
Hind’s view of credit card use is not unique. Apparently, a lot of students believe as he does, because credit card use and debt among college students is common.
According to InCharge Institute of American, the average credit card debt owned by college students is about $2,700, with close to a quarter of students owing more than $3,000. About 10 percent owe more than $7,000.
InCharge is a national, non-profit credit-counseling agency that offers debt management and financial education program.
The company has also reported that according to Nellie Mae, a leading provider of higher education loans, a study of last year’s student loan applicants showed that 78 percent of students had at least one credit card, 32 percent had dour or more credit cards and 95 percent of graduate students carried cards.
Hind said he believes “you should also make at least the minimum payment on your credit cards.” However, that’s not sound advice, according to credit counselors.
Many employers pull credit reports, and landlords and mortgage lenders look unfavorably on late payments, no payments and default.
Before applying and after applying for a credit card, here are some helpful tips and hints to consider:
– ” Student” credit card deals aren’t always the best way to go. As a student with a limited credit history, you’re considered a “credit risk” so although you may get the card, you will most likely have a high interest rate.
– Jobs that provide access to money, from fast-food cashiers to accountants to middle managers typically require credit checks. Know what your credit report says about you.
– Always try to pay $25-$30 more than the minimum payment required to stay ahead of your credit card bills.
– Be realistic about how much credit you can “afford”. A good measure is no more than 20 percent of your net income.
Information in this story was also contributed by KRT and author Sanyika Calloway Boyce, who travels nationwide to educate, empower, entertain and enlighten students about money, credit and debt.
Visit her online today at www.collegestudentusa.com.