Credit Cards for College Students

You remember the day you got your first credit card in college.

You were coming out of class and there sat the credit booth. They were giving away; a water bottle, a tee shirt, a notebook, something that caught your eye. Whatever the free gift was, you filled out the application. A few weeks later your credit card showed up in the mail. You thought that it would be a great way to pay for your books. Then it became a great way to pay for dinner out, clothes, travel, and anything else that seemed tempting. When you got close to your limit you just filled out another application at another booth.

You were not alone.

The average under graduate will leave college with three credit cards with credit card debt totalling at least $4,000. The average graduate student will leave college with 4 credit cards and be $6,000-$15,000 in debt with them. This is a difficult way to start life in the 'real world'. Three problems that college graduates are facing are; high debt to income ratio, poor credit reports, and their credit reports being checked by prospective employers.

High debt to income ratio'?

That term is a kind way of saying that you owe more than you can easily pay-off. Let's say that you owe $4,000 and you promise not to charge a single dollar more. You pay the minimum monthly fee of $100.00 and can't really afford to pay off more than that a month. It will take you 77 months to pay off that amount. That is 6 and a half years paying off that one amount. If you include this with a car payment, student loans, and rent you may find it difficult to pay even your basic bills.

If you are finding it hard to meet minimum payments for your credit cards it will show up quickly on your credit report and affect your credit score. When you make a payment more than 30 days late your credit company will charge you a late fee (This fee can be as much as $30.00 a month) and report it to the credit bureaus. Late payments cause your credit score to drop. Poor credit scores can affect your ability to rent an apartment, purchase a car, and your first home. It takes the average 'late pay' seven years to 'drop off' your credit report.

A new trend in hiring.

The final and scariest problem is, credit reports being checked by prospective employers. Your credit report is checked to see how reliable you are to your creditors and how finically responsible you are. Your future employer can check back seven years on your credit report. If your credit report shows too many late payments or too high a debt to income ratio that employer may look to another employee with a higher credit score.

Do you know what your Credit Report says about you?

After you order your Grad check, order a credit report that includes all three credit bureaus and your credit score. You will want to know what your credit report is saying about you, before anyone else does. If it contains negative marks you can wait seven years for these marks to 'drop off' or you can see about disputing the negative marks. The important thing is to find out quickly, your credit report maybe as important as your diploma

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