College is the first time a young person is away from home and making decisions on their own. There are many important choices one must make in college, all of which positively and negatively affect the rest of one’s future. Establishing and maintaining good credit in college is prudent; which has both short term, and long term effects.
In college, students are presented with the option to begin the process of establishing credit. Often times they are offered credit cards and many other payment options throughout college to help them in managing their day to day lives. Depending on how well one manages their payments and bills will determine their credit standing.
There are three possible outcomes, “no credit,” “bad credit,” and “good credit.” It is essential to have the latter of three in order to get ahead in life and prepare for the future.
Having “no credit” simply means that the person has not established a credit history. Although not having credit may seem like the best way to get through college, it is essential to begin establishing a history of responsible management of your money and credit as soon as possible. Having at least one credit card that is used regularly for purchases and paid off on time is a great way to get started. For example, a student may need a car to get to class everyday. If the car should breakdown, chances are there isn’t any money readily available to have it fixed. Without access to credit, the car cannot be repaired until after the necessary money is saved. With a credit card, one has
the power and flexibility in their wallet. Whenever unexpected emergencies arise, one can be prepared. Having a credit card allows students to easily and smoothly deal with emergencies.
In the long term, once a new graduate lands a job and has a little extra money, he or she might want to buy a nice new car. Without a good credit history it will be very difficult to secure a loan for the new car. The only way this can happen is if they have successfully established credit. Even though the student does not have a bad credit rating, it will still be difficult to get a loan because of the lack of any credit history.
Having “bad credit” is far worse than having no credit at all. When people find themselves in such a predicament, it usually means that a person has not been responsible in the management of their money. It is very tempting to think that since one has a credit card, they can go out and buy whatever they want with little thought about what it will take to pay it back. Aimlessly charging purchases to credit cards forces the bills to start piling up. Before the student realizes it, they can easily have accumulated tens of thousands of dollars in debt with little ability to pay it back. Knowing that the student has to make the minimum payments on his or her credit card bill every month will most likely begin to add stress, and wear down on the student. The possibility of failing due to the added stress will complicate the situation even further.
“Good credit” is the best possible thing to have in college. With a good credit score, so many more doors open up. When applying for a job, some people look at credit
history try to help figure out how responsible and mature a person is. A good credit score puts a person one step ahead of all the people with “bad credit” in the outside world. It may seem like just a minor detail, but it plays a big role in everyday life. It will help during college and in life after it.
It is important to establish and maintain good credit throughout college. America is full of opportunities, without good credit, college graduates cannot succeed and get ahead in life. Having “no credit” may appear to be the safest, but it is essential to have a credit card in your wallet and a good credit score to your name for emergencies in college and life later on down the road.
Such good advice for people to take! Especially now that I'm looking at buying a house/condo, I am glad I built up some credit while in college. :-)
I... just hope this blog doesn't fall victim to spammers offering payday loans and free credit reports. AAAHHHHH!!! :P
"What a crazy random happenstance!"
Dr. Horrible's Sing-Along Blog
Read my Blog!
I'm afraid of credit cards. I really did NOT want to get one, but my Dad insisted...
Anyway, I still prefer using my debit card because I know it's getting paid right away. I know credit cards are important...but I also know how forgetful I am, and I'd probably forget I used the thing.
*~*~*~*~
I need some more input from y'all here in this forum topic: A ProgressiveU Radio Show/Podcast
I think this is an idea that can improve the ProgressiveU community and add a new dimension to t
Have you considered keeping a ledger? This can be as simple as a spreadsheet (or couple of spreadsheets in a workbook, if you're good enough with spreadsheet software), where you keep track of your incomes and payments. You can mark what you used to pay for something, and how much you paid, and subtract that from any income you receive.
I am treated as evil by people who claim that they are being oppressed because they are not allowed to force me to practice what they do. ~D. Dale Gulledge
Good idea. I'm always telling people I need to write things down or I don't remember. Like homework or meeting times with friends or anything somewhat important.
*~*~*~*~
I need some more input from y'all here in this forum topic: A ProgressiveU Radio Show/Podcast
I think this is an idea that can improve the ProgressiveU community and add a new dimension to t
The advice in this blog is excellent.
I wanted my daughter in college to start building a credit rating. My wife is a bank loan officer so I get very personalized banking services. I had her set up a credit card for my daughter with a fairly low limit. I also set it up so that the card balance is automatically paid from my daughter's checking account by an electronics fund transfer. I time the whole thing so that it happens about 2 days after I deposit my daughter's monthly allowance (also an automatic electronic funds transfer from my checking account) from which she pays for food, rent, books, utilities, etc. The credit card company gets their money first and my daughter can meet her other obligations with whatever is left after her credit card balance is paid.
This means that the credit card payment is never late, there is never any interest or penalties and it is always paid in full which is good for the credit rating and the credit card gets treated almost like a debit card with the debit happening once per month.
It is a pretty good system and in three years of college I have only had to bail my daughter out from over-spending a couple of times and she has usually had a fairly decent excuse. She has figured out that any money she spends using the credit card this month detracts from her ability to spend next month. She uses the card but is pretty conservative with it.
I use my credit card like it were my debit card. This keeps me safer on the fraud things that come up. I know how much I can spend and I stick to that. Every month I pay off the card after checking the statement. I have a very large limit for such a broke person but this is to cover emergency expenses. When they come up I can use my saved funds to pay down the large expense within a few months.
Credit cards a tricky road and I have done the bad credit card deads. The key is responsible money management and avoiding the free forall spending feelings that come up from time to time. Delayed gratification , my friends, it the best kind!
There are very few human beings who receive the truth, complete and staggering, by instant illumination. Most of them acquire it fragment by fragment, on a small scale, by successive developments, cellularly, like a laborious mosaic.~- Anais Nin
Most of the time It's our family who determine our spending habit.
The student who come from the rich family doesn't aware of those spending tips .
But i think establishing and maintaining a good spending habit should adopt no matter who you are,how rich you (your family)are.It's a habit ,a good habit ,For life.
Very good tips,Thanks for sharing.
--------------------
***Edited by sawaboof on 2.17.2008 for spam.***
I think that a college freshman getting a credit card is a VERY BAD IDEA. Personally when i moved out i did not go straight to college but you can be an idiot and know that most college freshmans just moved out of mommy and daddies house were they were takin care of and all most college freshmans want to do is party therefore not so ature so why would you give a person who lacks maturity a credit card? you wouldn't !!!!!! so my advice is WAIT!!!!!!!!!! at least until you are a junior in college and you don't have that wild hair up your ass like most freshmans do. this way you can avoid getting into credit card debt cause it really does matter and they say that bad credit is better than no credit but as a person who does not have good credit because i had a wild hair up my ass, i know that bad credit causes depression. and with no credit you can always at any point establish it when you are mature enough. And i don't care what anybody says 95% of college freshmans are far from mature enough. i bet most of them don't even know how to pay bills.