Why do you think they are giving you a free $17 compact disc to sign up? It's not out of the goodness in their hearts, that's for sure.  They will make that back many times over with your wild spending habits and high interest. Too many experts tell you to go to your parents for advice on credit.   We believe that advice is wrong because too often you have one generation of ignorance teaching another.  Many bankruptcies are from people in the same age group as your parents who got into debt problems in college and never got out. 

When credit card companies are trying to get you to sign up, they make life look so rosy.  "You can pay for your Spring Break trip to Daytona Beach, FL with your new XYZ Credit Card!" Your brain practically makes you think someone else is paying for the trip.  Just remember with airfare, hotel, car rental, food, and partying, you could end up spending $1500 or much more on Spring Break.  But once you get back to school a week later, can you afford the payments for all the bills you rang up while partying the week before?  How much will your monthly payment jump to when you get back? Can you even afford the minimum monthly payment? Most adults that are in sad financial shape don't realize that the root cause of their problems began with their first credit card.  This is what the credit card marketers don't tell you, and don't want you to know, the darker side of credit. 

It's important to realize how bad credit starts and how it ferments, so you can avoid it.  So let's scare you with some common scenarios.

You go to spring break and spend $1500, then come back and a month later it's time for books and tuition again, so you put that on the card too.  Going to a few parties, you stop at the ATM for cash advances on your credit card because your checking account is to low; you just paid the rent for your dorm.   Even if you have a card with 9% APR, many credit cards charge you 19.3 % interest on cash advances.  Many also have a 2% fee on top of the amount you withdraw.   While you're paying 4x what you should be paying for your books, they slip another credit card application in your bag at the register.  Wow, another card, let's apply, because the other one's filled up from Spring Break, cash advances, clothes, CD's, etc.   Now you are opening the flood gates on another channel of credit, which you should not be doing.  You should be paying off the balances of your existing debt.   This is what begins the spiral that leads thousands of college students every year into financial ruin, many owing $3000 - $8000 when they graduate.  You're starting to lose a bit of control as you bounce a few checks because you were playing the float game.  Now your bank slapped you with a $30 overdraft penalty, and your credit card nails you with a $30 late fee.  For some people, that's an entire monthly payment.  Many people can be paying over $100 a month just in late fees on all their cards, and not even notice that it's piling up.  Their minimum monthly payments don't even keep up with all the late fees.  By the way, that bounced check just landed right in your credit report, which may prevent you from opening a checking account in the future.  Most banks run a credit check on you prior to opening a checking account.   If you have any signs of bad credit, good luck trying to open a checking account.   Even smart people can caught up in this mess.  You should not say "It Can't happen to me", you should be saying "I won't let that happen to me because I will create a budget and spend responsibly".

The sad fact of life is that too many people under the age of 25 are filing for personal bankruptcy to clear off their debts.   That is not the answer because bankruptcy stays on your credit history for 10 years, while other items stay on your history for 7 years.  Too many people abuse bankruptcy as a magic wand to "make their creditors go away".  They make it appear as though their creditor is the bad guy, when really the person filing bankruptcy is the bad guy, for abusing their credit, causing the creditors to write off all that money as a loss, then avoiding the responsibility to pay back the creditors by legally cheating them out of what's owed to them.  Let's face it folks, bankruptcy is for cheating losers and is not the answer.  The answer is responsible spending.  Only use the credit cards in an emergency.  Try to seek financial aid to pay for books and tuition before just putting them on your credit card.  Don't pay just the minimum payment or it will take several years to pay off your balance due to the high interest rate.

The problem is that the credit card marketers hand you free credit cards making you think the world is yours without telling you how to run your world and the responsibilities that go along with it.  They should give you a strict warning that the way you behave with your card while you're in college, will determine how good a deal you'll get on a car years after you have graduated.  It's all cause and effect.  If you misstep today, you won't be able to open a checking account or credit card years from now.  If you're late paying your credit card or other bills, many creditors will note that in your credit report.  This can keep you from getting a credit card, or buying furniture, or moving into an apartment. 

If you have bad credit, you'll get raked over the coals so badly by the car dealers, you may end up spending $5000 more on a car than we will, AND they'll make you think you're spending less by spreading your monthly payments out over 60 or 72 months.  They'll lie and cheat you, telling you that credit life insurance is required because of your bad credit, or they'll make you buy a $2000 extended warranty package to "qualify for the loan".  Well gee, why do they want you to spend $2000 more for a loan that they are worried you can't pay back anyway?  Both of those tricks are against the law, but they thrive because of the ignorance of these poor souls, low on self esteem.  Most often they pull the spot delivery scam on you, calling you weeks after you bought your car to tell you that "your financing did not go through, and your payments will be $50 more per month."  Let's face it, when they let you drive off the lot, they know whether or not you'll qualify for the deal as signed or they would not let you drive off with that car.  Find out much more about dealer scams at our other consumer advocate site called CarBuyingTips.Com If you think that's bad, look at "credit doctors".  They'll charge you $300-$1000 up front lying to you that they can erase your bad credit, which is not true.  They just rely on your desperation to feed their often illegal money machine.  You can repair your own credit for free.

Establishing Credit:
If you are making a high priced purchase such as a car and need to establish credit don't let you self be ripped off by a salesman who offers to give you a "great opportunity" to establish credit by charging a ridiculous APR.  If you are a student working at the university, you may be able to get a loan through the credit union.  Try there first, it could be the best place for you to establish credit.  Some college students, when buying a car, have their parents just buy it for cash.  This is good, but does not establish credit for you.  You might be better off having them put down a sizable chunk of cash, then you carry the remaining small loan balance.  When you finish paying off the small loan balance, you have established yourself as a creditworthy person, and should find it easy to get credit later on, and more importantly, at a lower interest rate than 18%.  Having a credit card under your parents' name does not establish credit for you.  Try the Discover® Student Card to establish your own credit.

TRICKS TO AVOID CREDIT CARD FEES

If you have good credit and normally pay your bills on time but one month something happened and you were a little late you should try this.  Call up your credit card company and ask them if they'll remove the late fee.  Many will if it's your first time.  They'll give you the obligatory 10 second lecture about the importance of sending you payment 7 days in advance to allow for snail mail.  Have a nice day.   If they do not give in simply threaten to close your account and transfer your balance elsewhere.  If you are a good customer this will get their attention.  They make money when you have accounts with balances each month.  The last thing that they will want to do is lose you if you normally pay on time.

Are you tired of paying those annual fees?  Here's something you should try.  Call up the credit card company and tell them that you have many other cards which don't charge annual fees.  Tell them that unless they remove the annual fee you will cancel the account.  If they really want your business, they'll oblige. If not, be ready to cancel the account, no human being should ever have to pay an annual fee.  You pay enough in interest.  But if you have credit problems or have been late with your payments more than once, you may not have a chance with this one.  It's still worth a try.

More Money Saving Ideas While You're In College
If you're going to spend, you might as well save.  Coolsavings.com is one of the most popular sites on the web.  Many people use it religiously to print coupons.

Credit card offers you get in the mail introductory APR
Make sure to read the fine print.  The 2.9% APR offers you see are introductory periods that are only a 2-6 month program, then it goes up to 14-18% APR.  It may save you quite a bit of money to transfer your balances to a card with an introductory low APR (of course, you shouldn't be carrying any balances to begin with) but make sure to watch that introductory period ending date.  As that date approaches you should contact your other cards to see if they'll allow you to transfer back your balance at a lower APR.  Keep moving your high APR balances around to your accounts that have low APR transferred balance offers.   Most low APR offers are usually 6%-10% depending on the economy.  By moving your higher APR balances to these lower APR offers, you'll avoid ever paying the typical 18% APR that most cards have, for about 6 months, sometimes longer depending on the plan.  This whole process is like your grandparents going to different banks every 6 months, moving their CD's to whichever bank has 1/10% higher rate that day.  But use this process carefully, if you move the balance from card A to Card B, don't be a moron and run the balance up on card A again.  Balance transfers are dangerous in the wrong hands so be careful!

Links To Useful Consumer Info & Credit Sites
CarBuyingTips.Com	This awesome FREE consumer advocate site is the best of its kind.   We should know, we created it before DebtWizards!  It reveals dealer scams, negotiating tips, determining dealer cost, buying & selling used cars, tons links, info on financing, leases, and free Excel spreadsheets to download.

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