How Students can Use Credit Cards Wisely

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How Students can Use Credit Cards Wisely
If you ask most 18 - 24 year olds what their life's most pressing worries are, chances are most of them will cite student debt somewhere near the top. However, while students continue to depend on large student loans to get them through their higher education, their rates of credit card usage are considerably lower than the national average: while 66% of Britian's population own a credit card, only 24% of 18-24 year olds do, and even fewer use their credit cards actively.

APACS, the UK Payments Association, has recently launched a credit card advice guide for students, called "Cards and Students", which aims to provide them with key facts and tips on how to manage responsible borrowing whilst at university. Along with full financial advice for new students, "Cards and Students" provides tips towards achieving good financial management; advice on protecting against fraud; and a list of ten questions to ask before choosing a credit card.

APACS initiative seems to have met a certain need in the student market; as the cost of living continues to spiral and the advent of top of fees this year causes even more financial pressure building up, this kind of scheme of financial advice targeted at a social group who sorely needs it is definitely a breakthrough. Sarah Quinn, APACS' Director of Communications comments:

"This advice guide is designed as a quick and easy checklist for students. It provides information they need to make informed decisions about their personal finances and clearly explains the various card payment options available to them.

"Nowadays, most students expect to be in debt when they graduate and whilst it might be impossible to avoid student loan debt, getting a handle on managing your finances can make the world of difference. We have an important role to play in educating all people, not just students, about responsible borrowing and the benefits and risks of using plastic cards."

While the rate of student debt is growing rapidly, students in Britain may perhaps be thankful that the national average student credit card usage in the UK is much smaller than that in the United States; a survey by Young Money magazine in 2002 concluded that the average American student owned three credit cards: at least 78% had at least one, and nearly 32% had four or more credit cards. Although the average British student's credit card debt is not quite this staggering, it does indicate the general direction in which credit card usage can spiral unless brakes are imposed.

While APACS guide gives much needed advice, a large number of credit card search and credit card comparison, such as Moneynet exist to provide consumers with enough data to make an informed choice about which credit card will be best for them. Britain's leading credit card companies, like Barclaycard also offer special student credit card packages, which often include deals that are designed to ease their financial burden, such as favourable payment plans on laptops and discount vouchers from a variety of high street shops.

Michael is a keen writer living in Edinburgh. Michael's Website: Taxis Belfast

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How to Regain Credit Card Control

Credit cards easily get out of control. You simply don't realize how much you are charging and how little you are paying. Before you can even think about paying your card off entirely, you have to simply regain control of your credit card debt.

Here are five simple steps that will help you regain control, and eventually pay off your debt. Follow them step-by-step and you will find that they aren't overwhelming or too difficult. In fact, they don't take much time at all.

1. Pay more.

You shouldn't carry a balance on your credit card from month to month, but you probably are anyway. If you are only paying the minimum payment, you are slowly killing yourself. This will stretch your payments out for decades. Yes, decades. You need to start putting extra money to each credit card payment. Even if it is only $15, you are saving time and money.

2. Make a phone call.

Take the time to call your credit card companies and request a lower interest rate. It isn't hard to do. You simply request a better interest rate. If you are a good customer who makes his or her payments on time, you will probably be successful. Tell them that you want the lowest rate possible. You can even say that you have received an offer to transfer your balance to another card at a better interest rate. You want to give them a chance to compete. If they won't lower your rate, consider switching to a card with a lower rate.

3. Say goodbye.

Send your cards on a little vacation. If you have debt and you can't pay it completely off, you need to stop using your credit card for now. Put it somewhere that you won't be able to easily access. This removes the temptation to simply charge this one thing. I suggest a safe deposit box at the bank. This usually always works. If you have a true emergency, you can get it. But it often isn't worth the hassle to get it to just buy a new sweater.

4. Look for money.

Now is the time to start paying that debt off with what you already have. If you have an 18% credit card and money in the bank earning 5%, you are losing 13% each month. Take your savings and pay off your credit card. This will save you interest and a lot of worry. Then work on building back up your savings by having the amount you paid in credit card debt automatically deposited into your savings each month.

5. Vow to change.

Now that you have seen the stress and problems that credit cards bring, you can make a committment to change. Credit cards aren't the problem, they just contribute. The problem is the way you spend. You need to realize that you cannot continue to shop the way you do. You have to change your spending habits so that you aren't tempted to use your card. It is hard. People slip back into it easily. But you need to find a way to remind yourself that it isn't worth it. Regain control of your credit and turn it around.

Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!




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