Student Credit Card Dangers

By: Nick Makaryk

A lot of students take far too lax of an attitude towards credit cards. They are after all easy to get. You can apply online and be approved almost instantly. Of course, it's not so casual when it comes time to make your payments especially when you're too short on funds to make your minimum monthly payment. Your debt can get out of hand before you know it.

You might then find what you think is the answer to your problems; balance transfer. Seems like the perfect solution, but hold on for a moment. Can you really just keep paying off one credit card with another one?

The answer is no there will come a crash when you can't keep it up anymore. Balance transfer is just another way of saying delaying the inevitable. You really don't want a whole wallet full of credit card if you are having trouble dealing with just one. You could get yourself deeply into debt in no time at all by this ill conceived debt management strategy.

Another bad habit college students often get into with their credit cards is the cash advances.

Simply put your credit card into any ATM and you'll get cash, no questions asked. ATM's are everywhere, so the temptation is everywhere. Rather than go home when you're out of cash, just find an ATM!

The cash advance is all too often abused by students. When you have a genuine emergency, this feature can be a life saver. However, this feature is use most often for wants rather than needs.

What is happening with a cash advance is that you are taking out a very high interest loan. You might, for instance go to the ATM and end up spending $100 on a Saturday.

That's $100 in cash advances in a single day! If you do this only once a week, you will amass $400 in debt in a single month! On some cards, cash advances are covered by a special, higher interest rate you can get in over your head very fast this way.

Have you unnoticed your friends running low on cash as the school year goes on? If you'll only buy that next round, they'll get you back next week after they get paid. So you put it on your card and wait.

In the meantime, your monthly bill is due and the credit card company really isn't concerned with whether or not your friends have paid you back yet. The card and the balance are in your name and you must pay it.

Mistakes made with credit cards are not forgotten as easily as your friend forgets that $50 she owes you. Shuffling your balance from card to card, all to buy what you can't rally afford and don't really need anyway does you no favors either. What it will get you is a bad credit rating.

Right now you may say "so what" but later on when it's difficult for you to buy a car or a home because of a poor credit rating, you will care, trust me. So think twice next time your friends ask you to get that round until they get paid.

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