College students urged to use credit cards wisely

College students urged to use credit cards wisely If you were on your own for the first time and armed with a credit card, would you find it easy to charge a pizza or CD? If you answered yes, you know what it's like to be a college student with a $500 line of credit. "Having a credit card is both a privilege and a responsibility," says Amber McPeek, education coordinator for Consumer Credit Counseling Service. "It's a privilege in that you enjoy the convenience of an immediate purchase. However, you have a responsibility to make good on those charges."

College students without restraint can find themselves buried beneath a mountain of debt in a hurry. These days, most college students have credit cards and carry an average balance of $2,100. With annual interest rates in th 18 percent range, that is a lot of interest. Here are some tips for college students on how to use credit cards intelligently:

* Beware of peer pressure. Don't let your friends talk you into buying things that you can't afford. Also, don't charge an item for someone else on your credit card even if he or she offers to pay for it. At the end of the month, you could be left holding the bag for an item you don't even own.

* Guard against being "nickled and dimed." Credit cards can be used almost anywhere to buy almost anything. Small purchases such as convenience store sodas and chips can add up in a hurry. College students often don't have a lot of money to begin with and should try to be as frugal as possible.

* Pay off your card quickly. As a rule, charge no more than you can pay off within the 25 day or so grace period. If you have a large expense like a car repair, try to pay it off within 90 days or so.

* Observe the 20 percent rule. A good rule of thumb is to keep your monthly debt payment below 20 percent of your monthly take home check or allowance. We're not talking about a lot of money when referring to a college student working part time.

* Control your cards. Never lend your credit card to friends or leave receipts in a place where other people can find them. You may be required to pay a percentage of charges even if your credit card is stolen.

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