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Do college students really need a credit card?

If you don't trust yourself enough to pay the bill off in full each month, don't start.

By MSN Money Partner Nov 7, 2011 10:51AM

This guest post comes from J. Money at Budgets are Sexy.


Did you know that the average credit card balance for students is at a record amount of $3,173 right now? And that half of all undergrads have four or more credit cards? That's like one for every year you're actually legally allowed to have a credit card.


That information and the following questions came from my friend Miss Lissy, and parts of my answers were previously published at her university's paper, Wolfprint Online. I hope my answers help you.


Do you think college students should worry about having a credit card? 


That's hard to answer without knowing specifically who we're talking about here. Some people are great at managing credit cards and even taking advantage of the perks credit cards offer us, and others should never ever even touch plastic. It all depends on how good (or not) you are at avoiding temptation and behaving yourself. (Kind of like beer in college. Some can party like no other and still get straight A's, and others just fail miserably when they get around the keg.)


But, generally speaking, I think getting your first credit card while in college can be a good thing. It helps not only to set up a credit report in your name to get you going later in life, but it also helps you learn to manage and deal with money in "real life" once you've stepped away from Mom and Dad.


I got my very first one freshman year (well, co-signed, anyway) and I was told very firmly that it was only to be used for emergencies or when they specifically told me I could use it to buy books or whatever. That definitely ingrained smart credit card use over time, and ever since I've been pretty good at paying it off in full every month. (I use credit cards to pay for everything to get the rewards and make budgeting easier.)


What is the danger of credit card debt?


Honestly? The mental anguish and stress it puts on you. Out of everyone I know still trying to pay off credit card debt, the one thing they all have in common is the frustration and anger of putting it off for so long and letting it build up. Having $100 here or there is no big deal in the grand scheme of things, but you keep adding to it, and then pushing it off and saying you'll "do it later when ___ happens" only makes it worse. Mainly in your brain, and obviously in your pockets as well.


It really isn't worth risking, so if you don't trust yourself to use credit responsibly, walk away and just avoid it all together. There are other ways to get money, like getting a job! Post continues below.

What are your top five credit card tips for college students? 


Probably a mixture of everything I just said:

  1. Only get a credit card if you really believe you can handle the responsibility.
  2. If you do apply and get qualified for one -- it might take your parents co-signing for you, which means that if you mess up they are held responsible -- use it first for  emergencies only. Which, hopefully, will be never. But it'll get you used to carrying one around (which you should do, in case that emergency we're talking about occurs).
  3. Once you're comfortable with it, practice spending a little money here and there, and then paying it off right away. You don't even have to wait until the bill comes. Just log on to the card's website and pay it right off. This will help establish credit, and show that you can responsibly handle items you put on there every month.
  4. Always take five minutes and scour your bill when it comes in every month. You will be amazed at the mistakes that can show up there every now and then. I literally just found three, all in one bill, which would have cost me almost $200 total.
  5. Did I mention only get a credit card if you can handle it? 

Did you have a credit card in college? If so, what was the No. 1 mistake you made with your credit card while in college?


Yes, I had a credit card and the one mistake I probably made actually happened when I tried to get another credit card -- just so I could get one of those stupid free shirts. Remember when they used to have those offers? You used to be able to get a cool free T-shirt just by signing up to get a card, and all of us were stupid enough to fall for it and then got a card with annual fees sent in the mail -- which we all fought and won, but we shouldn't have gone for it to begin with. (Which actually brings up another point: You don't need a card that has annual fees. Find one that's 100% free and only charges you when you leave a balance.)


Another mistake I made was putting chocolate bars and sodas on my "emergency card" after Year Two. I was (again) stupid to think my parents would never find out and ended up getting an earful when the bill hit my parents' home (remember, they had co-signed for it so they saw everything I did). Not a smart move. I highly recommend playing by the rules.


The real danger

The main reason many people use credit cards, when it comes down to it, is because they want money they don't have.


Yes, it's true that you first start out just "floating" yourself the money because you know you're going to get paid in two or three weeks or whatever, but over time you start getting comfortable with this make-believe budget you have in your head, and before you know it you're leaving more and more money on your card and never wanting to pay it off.


And I don't blame you -- it's annoying! Who wants to give all their money away to a bill?


But people find themselves owing more money than they have, and wanting to place the blame somewhere else. Well, I've got news for you: It's your fault, and only you can get yourself out of it. And one way to do that is to catch yourself before you reach that point and cut yourself off. It's never fun, and it's never what all your friends are doing, but if you want to have a fiscally responsible life, not getting into credit card debt is the best way to get there.

If you don't trust yourself enough to pay the bill off in full each month, don't start. The world worked fine for years without credit cards, and surely you'll be fine without them too.


The No. 1 rule to being financially secure is this: Never spend more than you earn. That's it. It's that simple, but no one ever wants to follow it. If you want to live the good life and achieve financial freedom one day -- and that can mean all kinds of things to all kinds of people -- just follow that one rule. I'm not going to say it's easy, and that you'll always want to do it, but if you can muster up the courage and stick to your guns for as long as you can, you'll reach that success before you know it.


Then you'll be in control, not your debt. And that's an awesome place to be, my friend.


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