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The following is a guest post by Zach Younkin, a college student at Columbus State Community College.
College is a very expensive time in any student’s life. With classes costing thousands of dollars each quarter and textbooks adding hundreds if not thousands to that total, it is easy to rack up thousands of dollars of credit card debt. Plus, add in that late night pizza and beer runs, it makes sense that the average college senior has $4,138 of credit card debt.
As a college student, I can vouch that it is difficult not to get into thousands of dollars of credit card debt. When you see a new pair of shoes, a new cell phone or even that new gadget (iPad anyone?), it is way too easy to whip out that plastic and pay for it that way.
I am currently in the process of making it through college with under $10,000 of debt and credit cards are a major pitfall in my journey toward that goal.
Do you use credit cards?
Yes, I do use credit cards.
I believe that they are a valuable tool in creating a solid financial future as you must have credit to get credit. As a twenty year old, I look forward to the day when I am able to move into my own house. As a twenty year old, I look forward to the day when I am able to drive a new car off the lot. Those two events are two of the most common uses of credit and can bring great satisfaction.
How are you using credit cards safely?
In order to build my credit, I purchase only essentials (gasoline, food, etc) on the three cards that I have (I rotate my cards, so that no card gets canceled) and pay the balance off in full each month. In addition to the essentials, I use companies auto-pay for my cell phone bill, Netflix subscription and my Gamefly subscription and also pay those off each month.
In doing so, I am able to show credit companies that I am able to pay-off these debts each month in a timely manner.
What benefits are there to credit cards?
As I mentioned before, you must have credit in order to get credit. That is the biggest advantage to having a credit card. By showing companies that you can handle student credit cards, it allows you to build your credit score which will allow you to get lower interest rates on any type of loans.
A much smaller advantage of a credit card is the accrual of points or miles that can be cashed in for bonuses. In my situation, I buy a ton of textbooks, software and gasoline. I use a specific card for each of those situations and that allows me to gain bonus points. I have so far, accumulated $50 on Amazon and over $100 on Buy.com, just for paying for the necessities. Those bonuses allowed me to save some money on the seemingly endless amount of money that is required for textbooks and software.
Should I get a credit card?
I do recommend that every college student has one credit card with a low credit limit on it. Buy a tank of gas on it. Buy a pizza on it. BUT PAY IT OFF ONCE THE BILL COMES DUE!! DO NOT PAY THE MINIMUM BALANCE!! In doing so, you will be able to build your credit score without having to worry about having thousands of dollars to repay back.
Do let your parents know that you are getting a credit card and give them online access to your account so that they can keep an eye on the balance and (if your parents are really nice) help you out on the payments.
Credit cards are a valuable part in your financial future. Credit cards can give you financial stability or they can hold you down for the rest of your life. College is the starting point for both worlds. In college, you can learn to use a credit card wisely and reap the benefits or you can use a credit card poorly and endure the results for the rest of your life.
It’s all up to you!
Zach Younkin is in his second year at Columbus State Community College in Columbus, Ohio. He is a blogger who is passionate on making it through college with as little debt as possible so that he can go on and change the world. You can read more about his journey to make it through college with as little debt as possible by reading College for 10k and follow him on Twitter @zachyounkin