Credit Card Tips

Students working on laptops in the Starbucks LoungeAs a college student, the first mail you're likely to get in your mail box is an offer for a "Student Card" from a major credit card company. They will offer to give you a line of credit, even if you have no credit history, and even if you have no job. "Wow," you say," I can buy all the pizza I want and see all the movies I want!" Think again! It seems like a great deal, but it's not. It's insidious and you should be outraged. Think about it: Why would they give you credit when they KNOW you have no job?

Because they know several things about college students in general:

1. A lot of students have Mom and Dad paying the bill when they're in the college. So, you run wild with a card, they pay the bill and the bank makes out big time.

2. Students coming out of college and entering the job market for the first time are particularly vulnerable. Banks know this and they know that your parents know this. Even if Mom and Dad wouldn't pay your bills in college, they would probably take over the payments afterwards until you get a job.

3. A lot of expenses seem important in college and you are willing to pay it off later. But, banks know you don't do the math to see how much that debt grows before you can pay it back.

Tips

This is what the banks are doing when they offer you "student credit". They are taking advantage of your unique vulnerability to turn a fast buck. They know students get into lots of pinches and that—combined with a very tight budget—makes card use almost irresistible.

Too many students get into very hot water over credit cards. You may have to take on a heavy workload because of debt, with work schedules that interfere with your studies. If you're not careful, you can wreck your entire academic career. Don't let them do this to you! That warm and friendly bank turns very, very ugly indeed when you miss a payment or two. And, unlike student loans, the payments begin right away - job or no job.

Know what they are really offering when they come at you with that great credit card offer and politely say "no." Northern offers a great opportunity with Wells Fargo bank to link your NMU student ID to your bank account to use as a debit card. One less card to carry around using money you've got in the bank. And, best of all, you'll graduate with a clear credit rating and you won't be weighed down by massive debt.

(Information compliments of John H. Bickford at the University of Massachusetts and Alison Crowley at Northern Michigan University)