College students find it easy to get and use credit cards. Sometimes too easy,
and plastic abuse leads to battered credit.
However, preventing credit ruin might be easier than you think.
Kristin Scully pays her bills on time and in full when possible because she
doesn't want to end up like one of her friends. "He has a lot of problems now
when he tries to rent an apartment because he can never put his name on the
lease because he doesn't want the renters to go and look at his credit card
history," she says.
Credit cards are the cause of many college students' financial woes. A vice
president for Wachovia Bank, Bonnie Welborn, says younger customers with bad
credit often have something in common.
"The biggest issue I see especially with
students or with young people is the responsibility in knowing you have to take
care of that monthly," she says.
Keeping up with monthly statements and bills isn't a worry for Jennett Burnell
because she prefers an alternative to credit cards.
"I don't want to have bad
credit so the check card's just the easiest way, and I don't have to be spending
money I know I don't have," she says.
Credit card companies are going to great lengths to attract young customers
with email advertisements and even platinum card applications. Discover card,
for example, is offering its platinum card to some students, but as one student
put it, she reached her Discover card limit: you discover you can't pay.
"With anything financial, you want to stay on top of that because it can hinder
you from getting on with the rest of your life," Welborn says.
But if you decide to use a credit card, there's a way to choose wisely. Look
for a card with little or no annual fees, a reasonable credit limit for your
budget, a low interest rate, and minimal late fees.
Still not sure you want a real credit card? Check into other alternatives. Open
a bank account in your name, get a check card to use as a credit card substitute,
or get a pre-paid credit card. All these methods are great ways to establish
credit when you keep track of them responsibly.