Campuses Restrict Solicitations for Student Credit Cards
Posted by admin on Jan 30, 2009
As a student, I remember being bombarded with solicitations for student credit cards when I walked through the quad. In the spring and fall, there were big booths set up outside giving away shirts, mugs, music and cash. The banks were trying to lure new applicants for student credit cards and it worked. It was so easy to get a credit card. Everyone I knew who applied for a credit card on campus had one in their hands within a week or two. I can think of just as many students whose balances grew and grew, because they only paid the minimum required payments. You can see why it was an easy sell. It was like free money during a time when most of us had little. Ah, the freedom. Oh, the places we could go. The amount of debt we could ring up.
Many university administrations and state governments are now restricting solicitations for student credit cards on campuses. They have begun to realize that a lot of students are taking on the responsibility of a credit card before they have the knowledge and income to support it. Students are an easy target, after all. A fair number of them barely make ends meet, have student loans and are on their own for the first time. Give them a credit card and they may not know what they are getting themselves into. The results of a U.S. PIRG survey made public in March of 2008 examined the credit card behaviors of students. The freshman that were surveyed carried an average $1300 balance on their student credit cards, and seniors carried a $2500 balance on average. One quarter of the students in the study had paid a late fee at some point. 5 percent of the students surveyed had been so behind on payments on a card that it was canceled.
Banks contend that their relationships with universities and marketing strategies for student credit cards are not harmful to students. Student credit cards provide a chance for students to build a foundation for their credit history. Banks say the results of the U.S. PIRG survey paint an exaggerated picture of the spending habits on student credit cards. Other studies indicate that a mere 30 percent of students actually have credit cards and the average balance carried is less than $500. Many credit card companies are now offering free seminars to help students learn to budget and manage their finances responsibly. They believe there is a role for student credit cards in the financial development of students.
University administrators do not want to ban student credit cards from campuses. They simply want to assure that banks offering them on their campuses are doing it in a way that is not predatory or misleading. If they are used appropriately and with an understanding of the long term effects of debt, student credit cards can provide students with a sound and dependable financial resource.
I could have used this info a while ago. This is a helpful blog.
One thing you will have to consider is that student credit cards are not merely convenient; they can also help you build a solid credit history for your future, not to mention teach you important money management skills that you will carry into adulthood. It is therefore important to keep certain things in mind regarding the use of student credit cards.
Go slow with your first student credit card. At this early stage of your credit history, you look for student credit cards that do not have annual fees and carry a credit limit of $500 or less. These are important considerations if you want to make sure that you are able to handle the financial demands of student credit cards.
Blog was great. Great post.
Alter your spending behavior. Write checks, use cash or a bank card that automatically takes the amount from your account. Your next step is to analyze your finances and figure out what you can live without in order to free up some funds. The most logical area of your budget in which to do this is discretionary items. Stop eating out, going to the salon, paying to have your car washed and purchasing entertainment items you do not need.
Again, do not reduce the amount of each payment as the balance becomes lower. The new amount for the payments on the next card should be the same as what you were paying down on the last card, plus the minimum payment from the last card. This will allow you to pay off more and more of the balance as you move forward, hence the term “snowball. ” When you free up a card with a low interest rate during your snowball, consider moving your balances to that card. This will allow you to pay less on interest and more on your balance, making your snowball even bigger.
As appealing as getting your own student credit card is, however, it is a major decision that should be carefully considered. With the many attractive benefits that student credit cards have to offer, it is easy to be confused by the variety of offers and simply go with the first credit card company that makes an offer. Patience is a tremendously valuable virtue to have at this stage, and you will be far better off taking the time to compare the different student credit cards available to find out which ones offer the best deals for you.
One thing you will have to consider is that student credit cards are not merely convenient; they can also help you build a solid credit history for your future, not to mention teach you important money management skills that you will carry into adulthood. It is therefore important to keep certain things in mind regarding the use of student credit cards.
This entry was really cool. Lovin your blog.
Your posts are great. Great post.
I will use this site in the future. Keep writing good posts like this one.
Great post.
The most effective method is to call up your credit card company and tell the customer service representative that you have a more attractive offer from another company and are considering switching credit cards. The customer service representative might send you to someone who specializes in convincing reluctant customers like yourself to stay, or you might stay with them throughout the call. Either way, be polite, lay out your case calmly and methodically, and be willing to negotiate. If the first representative cannot make you an offer you like during your first call, thank him or her, hang up, and call back later, when you might get a representative who is more willing or more able to help you. (Representatives are required to follow guidelines, but they have some wiggle room in deciding how far they are willing to help a given customer.
I will be sure to remember this place. My kind of post.
You should write more.
This entry was really cool.
If you cannot pay off what you wish to buy, think twice before putting it on your card. There are some cases in which credit cards are used for emergencies, like an unexpected car repair or a medical expense. If you have not overspent on unnecessary items and do not carry an unmanageable balance on your credit card as a habit, however, you will be more capable of handling emergency expenses and paying them off in a reasonable amount of time.
If you owe a significant amount on your credit cards and would like to start paying down that debt, the first step is to stop paying for things that increase your balance. Next, examine your budget and reallocate any discretionary funds to make larger payments (rather than the minimum payment) to decrease that debt quickly.
Have a nice day. Great information.
Cool. I will link here.
Interest rates may be increased, which means minimum payments will increase. Credit cards that have had a zero balance for a year or more are at risk of being closed altogether. Lower credit limits on credit cards can affect your credit score. A large portion of your score depends on the percentage of debt you carry when compared to your maximum allowed limits. That means that if your credit limit is decreased, the same balance you had on a higher limit now uses up a larger percentage of your limit.
A better option is a prepaid card, which offers all the convenience of a card. You can charge things on the card until the prepaid amount you established is gone. A prepaid card will not, however, help you build your credit. Financial experts usually tell consumers to pay off existing debts, keep the oldest account in good standing and resist the temptation to open new credit cards for bad credit. Accounts with a good status that you have had for a long time reflect positively on your credit score.
The debtor can use the card for small purchases, pay the balance off monthly, and gradually reestablish his credit rating over a period of time. Then, once a good payment history is established, the lender may gradually increase the credit limit and eventually switch the customer to an unsecured card.
This may sound like a dream come true, but there are cons to bad credit credit cards along with the pros. Certain lenders may charge outrageous fees in the first billing statement that drain the credit limit dry. They will also frequently charge high interest rates that can themselves eat up the credit limit and generate over limit fees and charge interest from the moment of purchase, rather than allowing the usual one month grace period.
This page is worth bookmarking.
Great.
Really awesome. This blog was great.
Blog more soon.
Prepaid credit cards for bad credit require a minimum deposit to secure the card; this deposit also becomes your credit limit. The best thing about this type of credit card for bad credit is that it is risk free; you cannot possibly truly go into debt because you will be drawing down on the amount of your deposit whenever you use the card. Keep in mind that, no matter which type of card you choose, your efforts will go to naught if your issuer does not report to all the main credit bureaus.
Be sure to educate yourself with all the terms and conditions that each of the credit cards for bad credit offer. You will not be doing yourself or your credit rating any favors by violating those terms while trying to rebuild your financial life.