It’s the time of year that many college students head off to school. While on campus, young adults have new freedom and face many new decisions and responsibilities, one of which may be getting and using a credit card. While someone obtaining a credit card may be intrigued by the idea of having thousands of dollars at their disposal, there are potential consequences that may follow a student past graduation and become a burden on their lives.
College students, like so many other consumers, can easily find themselves spending more money than they otherwise would if they did not have the convenience of a credit card. The ease of swiping a credit card is seductive and not seeing the money actually leaves your wallet can lead to a disconnect between a momentary impulse purchase and your resources. If one isn't careful, you can easily spend hundreds or even thousands of dollars more than you would have if you were limited to paying with cash.
Additionally, college students may justify having a credit card because they believe it will help their credit score. When a credit card is used properly and payments are paid off on time, it can help build one’s credit score. However, college students may not consider it a significant misstep if they miss a payment or only pay a portion of the monthly bill. This is false as even one late payment will appear on a credit report, making it more expensive to borrow or more difficult to get approved for a loan in the future.
While there are pros and cons to having a credit card, college students should think twice about potential the long-term impact on their lives. Most importantly, one should always remember that a credit card is convenient - it's a tool to use when you don't have the cash or your checkbook on hand, but it should never be used as a loan. A good rule of thumb for college students who don't yet have a career and a certain income is if you can't pay the particular purchase off at the end of the month, think twice and hard about making the purchase, as balances can easily build and spiral out of control
In Credit Card Debt?
Regardless of when you obtained your first credit card, you should consider your financial options if you have significant credit card debt. The dedicated attorneys at Weintraub Zolkin Talerico & Selth can walk you through opportunities to help you get back on track financially. Whether bankruptcy, debt negotiation, bankruptcy alternatives, or another option is best for you, our compassionate and experienced team will guide you through the process.
Contact Weintraub Zolkin Talerico & Selth online or by phone so we can start working with you. (310) 220-4147