Back to School: Resist Credit Card Temptation
By: Althea Chang

Whether they’ve had incomes or not, credit card companies have typically lured in college students, aiming to make them customers for life.

The Scene

At one time, “financial institutions were flinging large balance possibilities at students,” says Chairman and credit expert Adam Levin.

And that’s where the temptation starts. Students use credit cards for shopping, eating, drinking, paying for school-related expenses and even their school tuition. And when they’re charged late or over-limit fees, it’s no skin off the credit card company’s back. It works to their benefit, as long as they get paid.

From now until February, when new laws setting limits on credit card companies start going into effect, it’s very likely that students will be barraged with credit card offers, says Levin.

How Credit Will Change

“Universities are going to be a little more cautious about who they allow to flutter around the campus,” Levin says.

That’s because, when new credit card rules come into effect next year, the marketing of credit cards to people under the age of 21 will be restricted. And if a student can’t give proof that they can pay off a credit card, they won’t be able to get one.

In these cases, a parent would have to co-sign to ensure to creditors that if a child couldn’t pay off their balance, their parent would. In addition, credit limits could not be raised unless a parent is notified.

Credit Card Tips for Students (And Adults)

1. Don’t fall for every piece of piece of pizza, free food or t-shirt that you’re offered if you apply for a credit card.

2. Shop around for the best rates. “The best rates are sometimes online as opposed to in a line somewhere in the quad, and that permits for some reflection,” says Levin.

3. Remember that every time you fill out an application, someone is pulling your credit report, and there are consequences for that. Too many credit check can actually lower your credit score.

4. Make sure you can you afford to pay for what you charge.

5. Your aim should be to establish credit, not be forced to repair it when you get out of school.

6. If you can get discounts or points with your credit card, it’s OK to use it, even for large amounts, provided you set aside the money to pay your balance in full.

7. You may want to keep a separate account for paying credit card bills so you won’t be tempted to spend the money meant to pay them off.
8. Check your credit card accounts daily, not just to make sure that all transactions are your own, but to stay aware of “the ugly reality of what you’re doing,” Levin says.

—For more ways to save, spend, invest and borrow, visit

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