Already on ArticleSlash?

Forgot your password? Sign Up

Educating to Prevent Student Credit Card Debt

 


Visitors: 139

Many professionals in the financial industry warn against the dangers of student credit card use. They fear that young people will let their credit card use run out of control. Instead of fearing that young people will fail, try educating them about credit card use. After all, the benefits of getting a credit card while young far outweigh the risks.

The Risks Involved

Many young people have the perception that using a credit card is the same as paying with their bank debit card. They do not consider the extra fees or the risk of building debt. These people think that they can just go ahead and use their credit card for any purchases that they cannot afford at the time. This type of thinking can lead to a huge credit card balance. With young people, this can be particularly dangerous, as they do not have the income to pay off the balance. Credit cards allow young people to dig a financial hole that they do not have the resources to climb out of.

As their credit card debt builds, young people often don't recognize the problem until it is too late. Eventually their debt gets to the point that the minimum monthly payment only pays off the interest charges. Instead of seeking help with their debt, many young people ignore the problem and, worse yet, they even try to get a second credit card to build more debt. As these young people are trying to prove their independence to their parents, they are often too embarrassed to ask for help. It can lead to a feeling of helplessness.

Education is the Key

The root of the problem is that young people are never taught how to responsibly use credit cards. The school system chooses not to teach such life skills as money management or credit card use. This leaves the responsibility solely in the hands of the parents. Unfortunately many parents are starting to lose touch with their children just when credit education is most necessary. There are also some parents who do not know about responsible credit card use themselves.

Young people need to know how to use a credit card responsibly and how to avoid credit card debt. They need to know to only use their credit card for as much as they can reasonably pay off each month. They need to know all about credit card interest charges too. Without credit education, it is far too easy to make mistakes with your credit card.

The Benefits of Getting a Credit Card Younger

Sure there is the convenience factor of having a credit card when you are just out of high school. More importantly, a credit card helps build credit over time. The earlier you start building credit, the easier it will be to make large purchases in the future. Anytime you need a loan from the bank, the bank will look at your credit history. The longer you've built credit, the easier it is to get a loan. Plus you will pay lower interest rates. Without built up credit, you might even get declined for that loan.

Credit cards also give young people the independence that they need. Who wants to phone their parents each time they want to order something online? What about when you sign up for a video rental account or when you register for phone service? A credit card is a must. A credit card can even act as a financial safety net in tough times.

Conclusion

So unless young people get educated about credit card use, there is a good chance that they will have to learn by making mistakes. Help protect their future by giving them the tools to succeed today.

Fill out student credit card applications now to start building credit. Parents can also save money with gas card applications or cash back credit card offers .

(673)

Article Source:


 
Rate this Article: 
 
Credit Card Debt - Why Credit Card Companies Accept to Debt Settlement Deals
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

College Student Credit Card Debt, What to do Now?

by: Steven Turner (July 26, 2007) 
(Finance/Debt Relief)

Real Swell Tips For Managing Student Credit Card Debt

by: Donald Renal (June 18, 2008) 
(Finance/Debt Management)

10 Ways How Student Credit Card Debt Can Turn Your College Life Into Hell

by: Duran Mueller (June 12, 2007) 
(Finance/Credit)

Stop Paying Credit Card Debt - How to Gain Leverage Over Your Credit Card ..

by: Matt Couch (December 09, 2009) 
(Finance/Debt Management)

Credit Card Debt Tips - How to Capitalize on Federal Stimulus Money For Credit ..

by: Matt Couch (November 23, 2009) 
(Finance/Debt Management)

Quick Tips For Credit Card Debt Reduction How to Eliminate Credit Card Debt Fast

by: A. C. West (July 20, 2008) 
(Finance/Debt Management)

Credit Card Debt Settlements - How Can You Find Credit Card Debt Settlement ..

by: Matt Couch (December 07, 2009) 
(Finance/Debt Management)

Credit Card Debt Consolidation – An Effective Tool To Curb Credit Card Debt

by: Apurva Shree (April 02, 2007) 
(Finance)

Paying Off Your Credit Card Debt - Two Simple Ways to be Credit Card Debt Free

by: John Stevenson (January 10, 2008) 
(Finance/Credit)

Credit Card Debt - Why Credit Card Companies Accept to Debt Settlement Deals

by: Matt Couch (December 15, 2009) 
(Finance/Debt Management)