Article Reflection

Credit Card Tips and The Best Student Credit Cards (http://ptmoney.com/2009/08/21/best-student-credit-cards-college/)

I recently read an article (Credit Card Tips and The Best Student Credit Cards) that is about ways that college students can get some of the best credit cards available today. The author of the article points out some tips on ways that this can be done and I want to take this time to give my take on the information he presented.

One of the things the author mentions is that it’s “that time of the year” when parents speak to their students on the proper use of credit cards. The problem I have with that is that the talk about credit cards should not be like the talk about the birds and the bees, this talk should be much more in depth and should involve the parent and student attending a seminar or speech from someone in the industry that has expert advice to give about what the student will face in the next phase of their life. It’s articles like this one(Credit Card Tips and The Best Student Credit Cards) that let us at Cred Edge know that our mission is one that is very important to the future as a country- Yes it is that serious!

Don’t get me wrong, the author has some very good points that he shares, but the bigger picture is not touched upon. This is not an issue that gets near the attention that it needs and the sooner we as a country realize that the better off we will be.

There are many things that I would like to touch on that were brought up, one is that the author himself admits to foolishly using his credit card throughout college and also that studies are showing students are still doing this today when in fact it has increased drastically as to the amount of “foolish” usage.

All I have presented so far is in reference to things outside of the “meat and potatoes” of what the article is really about. Now I would like to point out that his pointers that he addresses are spot on and should be followed if a student wants to build and maintain high credit scores being responsible with the usage of their borrowed funds.

Here are brief summaries of the tips of his that I found to be the best of what he had listed:

Emergency Use Only- This is a good tactic to use, although in a perfect world sometimes it is not always possible to do this. As cost of receiving an education are still on the rise, along with the cost of living. What constitutes an emergency? That is a good question. An “emergency” to a parent might not be an “emergency” to a young adult. That is why we stepped onto the scene (so to speak). We are here to be direct in that ‘this is what it is’ and if you have questions ask…

Set a Low Credit Limit- This is a good point, but it can be very dangerous as well if the student is trying to build credit. The reason I say that is it’s not a good idea to max out a credit card because creditors will look at you unfavorably because of doing so. It might be a good idea for both the student and parent to agree that if the credit limit is say $1,000 that the balance never exceed $500 as opposed to setting the limit to $500 and telling them not to go over their limit. A good way to make sure this happens is Communication, that’s right talking to students regularly about their credit as opposed to just one time (which is another point that the author of this post brings to light and is a great way not only to help the student be responsible, but also gives a reason for parents to keep in touch with their children- any parent can appreciate that). That is why with Cred Edge we have on-going sponsorship and support. We continue to find help for the students we come in contact with well after our initial meeting with them.

Pay it Off Monthly- This is a tactic that is not only a great idea, but it is also a cost saving idea. If you are or ever have been a college student you know that whenever there is an opportunity to cut costs and save money that it is an option. Well this is an option that not only cuts costs, but it also allows for the student to build a sound foundation from which to grow financially. There are cards out there that offer a 0% interest rate to begin with so you can get away without paying the balance in full every month, but that just creates bad spending and overall financial habits and should not be abused because once the 0% rate is gone (most of the time) the new rate that comes on applies to the balance that has not been paid off once the introductory rate is over with. Be sure to check the terms and conditions of the card to see if that is the case.

Get the Right Card- This is something that is overlooked a lot of the time when people are giving advice on credit cards and I applaud the author for going this route. There are in fact many different cards with terms and conditions that are suitable for different situations and needs. Shopping for a credit card should be similar to shopping for a new car which I touch on in separate post. Nonetheless, knowing what you are getting yourself into with a credit card can be one of the most important financial decisions a student can make after high school and should not be taken lightly.

The author goes on to list the “Best Student Credit Cards” and if you are interested in his take on what those cards are as well as tidbits of what they offer check out his article at ptmoney.com/2009/08/21/best-student-credit-cards-college/.

In closing we all know that about any talk a parent has with their child is great to have. Communication is key in any relationship; however, some subjects need to be left to people with a bit more information on all there is to know about the subject. There are so many ways to help and hurt yourself when dealing with credit that it is best to have the initial talk about credit cards and student loans, but it is even better to take it a step further and reach out to an organization like ours that will take it a step further at no cost to you.

I hope you enjoyed this post. Please be sure to keep an eye out for my next post “Cards Are Like Cars”