For whatever reason I’ve been doing a LOT of interviews/case studies/spilling of my ideas and thoughts to others, and every time I keep thinking – “Man! This should be going on MY site too!” Haha… so, just like we did w/ the “how I became a full-time blogger” post, I figured I’d release my latest thoughts on credit cards and college kids too.
These questions come from my friend Miss Lissy, and part of it was previously published at her university’s paper: Wolfprint Online. If you want more brevity and/or actual stats and what not, check her article out instead, haha… for example, did you know that the average balance for students is at a record amount of $3,173 right now?? And that HALF of all undergrads have FOUR or more credit cards? That’s like one for every year you’re actually legally allowed to have a credit card! Crazy…. (She also interviews a student too – not just a crazy blogger like me, haha…)
Here we go… Hope my opinion dump helps you! :)
Do you think college students should worry about having a credit card? Or is it fine if they don’t have a credit card in college?
I think that’s a loaded question ;) And one that’s hard to answer without knowing, specifically, WHO we’re talking about here. Some people are GREAT at managing, and even taking advantage of, the perks credit cards offer to all of us, and others should never EVER even touch plastic. It all depends on how good (or not) you are at avoiding temptation and behaving yourselves (kinda like beer in college, haha… some can party like no other and still get straight A’s, and others just fail miserably when they get around the keg.) But, “generally” speaking, I think getting your first credit card while in college can be a good thing. It helps not only set up a credit report in your name to get you going later in life, BUT it also helps you learn to manage and deal with money in “real life” once you’re stepped away from mom and dad. I got my very first one Freshman year (well, co-signed, anyways) and I was told very firmly that it was ONLY to be used for emergencies or when they specifically told me I could use it to buy books or whatever. That def. ingrained smart credit card use over time, and ever since I’ve been pretty good at paying it off in full every month (I use credit cards to pay for EVERYTHING to get the rewards and budget easier, but I always make sure to pay it off before getting stung… though I’m def. no angel).
What is the danger of credit card debt?
Honestly? The mental anguish and STRESS it puts on you! Out of everyone I know *still* trying to pay off all their c/c debt, the one thing they all have in common is the frustration and anger of putting it off for so long and LETTING IT BUILD UP. Having a hundred here or there is no big deal in the grand scheme of things, but you keep adding to it, and then pushing it off and saying you’ll “do it later when ___ happens” only makes it worse. Mainly in your brain, and obviously in your pockets as well. It really isn’t worth risking it, so if you don’t trust yourself to use it responsibly, walk away and just avoid it all together. There are other ways to get money, like getting a JOB ;)
What are your top five credit card tips for college students? (Or you could look at it more broadly as they could relate to everyone, really)
Hmm.. probably a mixture of everything I just said:
- Only get a credit card if you *really* believe you can handle the responsibility of them.
- If you do apply, and get qualified for one (it might take your parents co-signing for you, which means that if you mess up THEY are held responsible), use it first for ONLY emergencies. Which, hopefully, will be never. But it’ll be safe to have and get you used to carrying one around (which you should do, in case that emergency we’re talking about occurs).
- Once you’re comfortable with ’em, practice spending a little money here and there, and then paying it off RIGHT AWAY. You don’t even have to wait until the bill comes – just log on to the card’s website and pay it right off. This will help establish credit, and show that you can responsibly handle items you put on there every month.
- Always take 5 mins and scour your bill when it comes in every month — you will be AMAZED at the mistakes that can show up there every now and then. I literally just found THREE, all in one bill, which would have costed me almost $200 in total! For no reason whatsoever!! 5 hours later (I never said it was easy) I got most of them cleared up and now I’m just waiting for the third to finally be resolved. But anyways, just proof that people/companies make mistakes and it’s usually up to YOU to catch ’em.
- Did I mention only get a credit card if you can HANDLE IT?? ;)
Did you have a credit card in college? If so, what was the number one mistake you made with your credit card while in college?
Haha, I’m always one upping you here! ;) Yes, I had a credit card and the one mistake I probably made actually happened when I tried to get ANOTHER credit card – just so I could get one of those stupid free shirts (remember when they used to have those offers? Or maybe Congress has veto’d those practices by now?). You used to be able to get a cool free t-shirt just by signing up to get a card, and all of us were stupid enough to fall for it and then get a nice card w/ yearly fees sent in the mail. Which we all fought, and won, but we shouldn’t have gone for it to begin with. (Which actually brings up another point — you don’t need a card that has yearly fees, find one that’s 100% free and only charges you when you leave balances on them!) Another mistake I made was putting chocolate bars and sodas on my “emergency card” after year two. I was (again) stupid to think my parents would never find out and ended up getting an ear full when the bill hit my parents home (cuz remember, they had co-signed for it so they saw everything I did). Not a smart move. I highly recommend playing by the rules ;)
If someone thinks they are going to be tempted to overspend but wants to have a better credit card, should they still go for the credit card? Or is it okay if they wait until they think they could handle it better?
I would say that if you’re already tempted to spend more than you’re making (thus, the reason for needing a credit card), you should hurry up and pay it off and then CUT IT UP. The main reason people use ’em when it comes down to it is because they want money they DON’T HAVE.
Yes, it’s true that you first start out just “floating” yourself the money because you know you’re gonna get paid in 2 or 3 weeks or whatever, but over time you start getting comfortable with this make believe budget you have in your head, and before you know it you’re leaving more and more money on your card and never wanting to pay it off. And I don’t blame you – it’s annoying! Who want’s to give all their money away to a bill? (answer: no one) But somehow, some way, 80% of people (i don’t know what the real % is, I just made that up) find themselves owing more money than they have and wanting to place the blame somewhere else. Well I’ve got news for you – it’s YOUR fault, and only YOU can get yourself out of it. And one way to do that is to catch yourself before you reach that point and cut yourself off. It’s never fun, and it’s never what all your friends are doing (believe me, everyone and their mom has some sort of credit card debt), but if you want to have fiscally responsible life, NOT getting into c/c debt is the best way to get there.
And deep down no one else wants to be the way they are either! It’s just no one wants to talk about it and they all think it’s OK because it’s the new “norm.” Well don’t let it beat you out. If you don’t trust yourself enough to pay the bills off in full each month, or to pay attention at ALL to them in general, don’t start. The world worked fine for years without credit cards, and surely you’d be fine without them too. The #1 rule to ALWAYS being financially secure is this: Never spend more than you earn. That’s it. Simple as $hit, but no one ever wants to follow it. If you wanna live the good life and achieve financial freedom one day (and that can mean all kinds of things to all kinds of people), just follow that one rule and you’ll be totally fine. I’m not gonna say it’s easy, and that you’ll always wanna do it, but if you can muster up the courage and stick to your guns for as long as you can, you’ll reach that success before you know it. And THEN you can waste all the money you want :) Because then YOU’RE the one in control, not your debt. And that’s one hell of an awesome place to be, my friend.
Questions? Comments? Concerns? Holler at me ;)
(Photo by cory schmitz)
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!