Students and Credit Card Debt
Brought to you by the American School Counselor Association
Pros and Cons
Should your college freshman apply for a credit card? Maybe. If you look on the bright side, getting a credit card can help establish a credit history, assure some security in an emergency, and teach your kids lessons about responsibility and independence. The dark side? A credit card is a quick way to create long-lasting debt.
Once your high-schooler has been accepted to college, your mailbox is likely to bulge with credit applications. Credit card companies offer such irresistibly low rates that two-thirds of today's college students have at least one credit card. Make sure your kids are aware of the risks that come along with plastic. Fill them in on the following points:
Help your kids understand that their credit record, just like their school transcript, can have a lasting impact on their lives. While the grades in a transcript reflect academic performance, the credit payments, debt, and income recorded in a credit history show the level of financial responsibility.
As a financial resume, your children's credit history will be taken into consideration when they want to get a loan, buy a car, rent an apartment, get a job, or buy a house. A strong credit history is vital to a good financial future.
With student loans and credit cards, college students can start a good credit history by establishing their ability to manage and repay debt. To help maintain a good credit history, remind them to:
Five Signs of Overspending
Teach your kids to identify these signs of overspending:
To learn more about the pros and cons of ATM cards, and to help your kids create a budget for their college expenses, visit "Money Talks," sponsored by MasterCard International and College Parents of America.
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