Student Credit Cards - Are You Financially Literate?

By: Keith Adams

You're danged if you do, and you're danged if you don't.

At least that's how it seems when it comes to college student credit cards. On the one hand, many young people seem to look at a credit card as a "free money" stream, having not broken out of the habit of living at home and having mom and dad take care of finances. These are your fellow students (maybe even you?) who run up credit recklessly, not realizing or caring that the cash has to be paid back eventually. Left unchecked, this pattern of behavior can ruin a person's credit history before it even has a chance to get off the ground.

At the other extreme, you have your fellow students (or, again, maybe even you?) who are so afraid of credit, also usually because they're still living out their parents' financial tendencies, that they avoid credit altogether. While not as bad as reckless spending, avoiding credit completely can make things difficult too, because it can be seen as a form of credit misuse.

For these and a bunch of other reasons, many colleges, universities and other organizations are offering courses aimed at educating college students and their parents about how to use credit cards responsibly, with the end goal of improving "financial literacy" for all involved.

Texas Tech is among the schools leading the way. Red to Black, the school's financial planning service, offers one-on-one peer counselling and does presentations aimed at helping students let go of unhealthy attitudes about money, spending and credit, and helping them develop new ways of thinking that will keep them "in the black and out of the red", hopefully for good.

Another organization that aims to help college students learn to manage their finances is USA Funds, which offers graduate and professional students a financial literacy module called Live Like A Student - Managing Your Funds, through its USA Funds Life Skills program.

According to Denise B. Feser, USA Funds vice president of customer relations, This module offers graduate and professional students commonsense advice for minimizing their college debt by examining their spending habits, locating sources of financial aid that do not have to be repaid, and identifying the warning signs of excessive debt.

If you're truly serious about starting your financial education the right way, find out if your school offers programs that teach students about personal finance. If not, then what better opportunity to start one yourself?

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