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Credit Cards Aren't That Cool

I remember that warm spring day on campus at The University of St. Thomas. As I walked from the upper quad to the lower quad, every credit card lender under the sun lined my path. They offered free t-shirts or frisbees in exchange for a line of credit, and that seemed decent enough. Without informing myself, I signed up for a credit line that I only paid off last year! Don’t fall into the credit card trap that I did; inform yourself on the realities of credit cards and debt.

The fact of the matter is that your financial strategy for college doesn’t only involve financial aid; it also involves managing your personal funds so you’re not piling on the stress.

College is challenging enough, so don’t add credit card payments to your list of to-dos. Ahead, we give a few tips on credit cards and how to avoid a mountain of debt. A good general rule of thumb is: if you don’t have the money in your checking account, don’t buy it!

First Off, It’s Not Free Money!
Regardless of the free t-shirt or frisbee, don’t think credit cards are free money! You’ll have to pay it all back, and the longer it takes you to do so, the more interest charges you’ll pay. It doesn’t make any sense to pay interest on small expenses. If your budget is stretched, eat out less, and cut back on entertainment. Youtube is a great toy, watch a documentary instead of spending $12 on a movie ticket (plus interest charges)!

The only time you should make a purchase on a credit card is if you have the money to pay for it in your checking account.

Debt carried over time = more debt! Many Americans live outside their means. Just think about it for a minute; which is the smarter move - fresh Nikes now, or less student debt later?

Interest Charges: That’s How Credit Card Companies Make Money!
Regardless of who you are buying a product from (like a credit card company) - they’re in business to make money, not to give you free stuff. A frisbee now could mean a lot of debt later. I can tell you one thing - the interest they hope to charge you will be much more than the cost of that t-shirt!

This book, entitled, Zero Debt: The Ultimate Guide To Financial Freedom, and other books like it, are a great way learn about how to develope solid financial habits. Responsible money management skills are some of the BEST ways to turn an education and a career into something powerful for your family! Here are five pieces of financial of advice for students.  Follow them and you’ll be on track to living within your means.

Photo by marsmet543

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