Get Legal

Plenty of students are experiencing being away from home for the first time, and money shortages are often a big problem. So when credit card companies offer students cards through the mail or even booths on campus, it's a tempting offer. Just what you need, right? \nThe answer to that question is both yes and no. Having a good credit rating is important, while having a bad credit rating can be harmful. How do you get the former and avoid the latter?\nFirst, sit down and figure out your monthly expenses and income. Income includes student loans and any money you receive from your family, plus what you earn at a part-time job. You shouldn't count on birthday presents or gifts traditionally given at other times of the year as part of your monthly income. If you get extra money, great, but don't count on it.\nNext, look into the credit card being offered. Is there an annual fee? A monthly fee? How high is the credit limit? What is the interest rate on the amount owed? What is the minimum monthly payment? Is there a penalty for late payment? Do you have other credit cards? Is the credit card to be issued in your name only? \nOnce you have determined you can afford a credit card, go ahead and get it. Just keep in mind that anything you purchase with the credit card will have to be paid with cold hard cash, sooner or later ' and usually sooner. Try to use the credit card sparingly at first. Establish a pattern of being able to make at least the minimum monthly payment before you get in over your head. It is tempting to use the credit card to buy things you wouldn't otherwise purchase, but it can get you into trouble.\nProblems arise when new students accept all the credit cards they're offered. Some of these students will use their new credit cards to purchase everything from groceries to the newest DVDs and everything in between. And they won't ever stop to consider that payment day is just over the horizon. \nOnce you get into that kind of mess, the best thing to do is to take a pair of scissors to those credit cards and come into Student Legal Services so we can start negotiating a payment plan with the credit card companies. Your credit history might be in jeopardy, and only by arranging a workable payment plan can we be successful in minimizing the harm.\nHaving a good credit history will help you obtain other credit and also be eligible for a higher credit limit. It might be a little difficult adjusting to all the new freedoms offered by college life, but you can make it through without harming your credit history by using a little common sense and a little financial restraint.