5 Tips To Avoid Student Credit Card Debt

Each year, a great number of consumers battle with credit card debt among them

, young student cardholders. While it is true that mismanagement may lead to trouble, parents can play a big role in helping a teenager get the most from his/her first account. Below are tips on how teens can build good history and avoid debt:

Ask your parent to be your co-signer. The CARD Act requires a co-signer for consumers who are below 21 years old. As a parent, co-signing your childs account will give you the chance to guide your teenager not only in making the right choice but in managing the account as well.

Sit down with your child and discuss the important factors that make up a good deal. Review the stipulations of the fine print together. Explain how using a credit card can help in building good credit. Share your personal experiences in how you were able to build and maintain a good standing.

Start with a low limit. Since students do not have regular employment, it is best to start with a program that has a low borrowing limit. While young people may see it as a disadvantage, it minimizes the risk of debt build-up. With a lower limit, they would be more conscious about their spending and in case they fail to keep up with their debts, it will be much easier for their co-signer to take over the repayment.

Check your bills. Students who own these plastic cash need to be smart about handling their accounts. Make it a point to review your monthly bills before submitting your payments. By doing so, you can check if there are incorrect or unauthorized charges billed to your account. In case there are, do not hesitate to call up your issuer as all consumers have the right to dispute false charges.

Do not use your card on entertainment. Students must realize that while having student credit cards can be convenient, imprudent spending can quickly lead to bad debt. If you plan to eat out or spend the night out with your friends, make sure that you have cash in your pocket. Before charging any expense on your student account, carefully consider the following points:

Is it important for your studies?

Do you really need it or just want it?

Are you sure you can pay off your full balance on time?

Where will you get the money to pay for your debts?

Plan before you buy. Never charge anything to your account unless you have given it some serious thought. If you saw a nice dress or a great shirt on sale while strolling on the mall, resist the temptation to buy it with your plastic cash, even if it seems like a great deal. If it was not in your plan to buy, then chances are you do not really need to buy it.

by: Sam Wilson

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