Need Extra Credit?

December 12th, 2008

It’s extremely thrilling to get your first piece of plastic – your very first credit card, that is. But like anything else, you need to learn how to use it properly. What’s the difference between a credit card and a debit card? How can you be sure that you stay out of financial trouble? What are finance charges? There are so many questions that may swirl throughout your mind!

In these economically-troubled times, college students have a lot to worry about. Not only is this a time to choose your business major wisely (or at all?), but it’s when many first learn the value of the credit card. It’s very easy to get into debt and with rising tuition, greater unemployment rates, and the brink of a recession, you may want to make sure your finances are in order.

Enter Extra Credit: The 7 Things Every College Student needs to Know About Credit, Debt & Ca$h by Bill Pratt. If you’ve never had a credit card before you should consider picking up a copy of this. With tips to ensure that you’re as informed as possible, this book may help you stay out of debt and prepare you for the future. One day, you’ll want to buy a house or get a full-time job and having a lot of debt can hurt your chances at getting what you want.

Some important points mentioned by Pratt:

“Your first credit card is like a “gateway drug.” Once you get used to spending more than you make, you want to spend more and more and open additional credit cards just to get by.”
“The average college graduate overestimates their starting salary by 44%. In addition, you will only get to keep about 65%-75% of your paycheck after taxes, insurances, retirement, etc.”
“The problem is that plastic is too convenient. It is too easy to spend more than you realized or wanted to because you were just swiping the card.”

So be sure to get some Extra Credit to increase your credit score when you are outside of the classroom.

-Amanda Fornecker

Entry Filed under: Budgeting