College Students and Credit Cards

To make money, some universities are offering up their own students to the credit card industry as sacrificial lambs.

Credit card issuers have happily been paying schools for access to their students. Consequently, it’s been common to see credit card marketers at tables stacked with cheap bling on campus quads. They will gladly give students a free t-shirt, a towel or maybe even a sandwich if they fill out a credit card application.

The New York Times wrote about this phenomenon in this recent article.

Young adults surely spend little or no time contemplating the sort of powers that their new pieces of plastic holds. What’s particularly disquieting about the credit card push is this reality:  By the time the typical American teenager turns 18, he or she has seen more than 10 million ads. Combine young adults’ easy credit with their craving to be “merchants of cool,” a term used by a PBS documentary, and you’ve got the ingredient for a perfect credit storm.

How can college students handle credit responsibly? Here are five suggestions for students:

1) Unless it’s an absolute necessity, wait until you’re a senior to get a credit card. You won’t need a credit history until then.

2) Get a card through a credit union, which often has more reasonable rates or through the financial institution where you have a checking and/or savings account.

3) Obtain a card with the lowest credit limit possible. What’s more, tell the issuer that you don’t want the credit limit ever raised without your permission.

4) Pay the bill as soon as it arrives.

5)  If you leave campus over the summer, make sure your card issuer sends the bill to your new address. If bills pile up over the summer, you’ll face a huge financial mess when you return to school.

Lynn O’Shaughnessy is the author of The College Solution and she writes a college blog for CBSMoneyWatch.com.