Debt 101 A Guide For Students Who Need A Crash Course On Credit Card Basics

24 December 18

credit card

We asked financial journalist Beth Kob, author of Get a Financial Life, and Michelle Singl, a syndicated columnist for The Washington Post, to help educate students on credit card basics:

Live within your means

"You need to take responsibility for yourself, but you've got to shut out all that noise that you hear, that you need to have this, that you deserve it," Michelle says. "You deserve to be financially stable and that may mean pulling back on using credit."

Create a budget

"Nobody wants to hear 'budget,'" Michelle says. "But it's the reality, and you know, really, it's so very easy to look at what you have and just spend within those parameters."

Get a job and use financial aid for your college expenses not a credit card.

Student loans have single-digit interest rates, flexible repayment plans and tax-deductible interest.

Debtors - attack that credit card debt

If you can't pay it all off, then at least pay more than the minimum payment due, Beth says. "Even if you could only pay $10 more than the minimum monthly payment, you'll save yourself dozens of years and thousands of dollars in interest because you're chipping away at the principal," she says.

Be credit card savvy

Read the fine print. Everything you need to know about fees, rates and grace periods is in that small print -- the terms -- that's issued with your credit card. What you don't know can hurt your pocketbook and your credit rating, Beth says.

Note to parents: Teach your kids about money before they hit campus

"Do not bail them out because what you're teaching them, again, is to spend money that they don't have," Michelle says.

Show your child how to use a checkbook, build up a savings account and live within his or her means, she says. "If you show them responsible use of your credit card, then hopefully they will pick that up."

If you absolutely need a credit card, use it responsibly

A low-rate credit card can be useful in some emergency situations, Beth admits. "But you have to realize, a credit card is a loan," she says.