Watch That Credit
Laura Vargo ’07
Counseling Center Rhodes Student Associate
College marks many firsts in students’ lives—from living on their own to the first credit card application—and credit card applications can easily lead to trouble for students learning how to manage their money for the first time. Here are some helpful tips for parents.
- Make a budget. Help students assess their needs versus their wants. Students will need to pay for tuition, housing, food, books, and other living necessities. If they don’t account for the necessities, they may be at a loss when it’s time to pay the necessary bills. Also, many students spend their money twice by buying meals off-campus already paid for in their meal plan. Encourage students to use the meal plan to its fullest. If students want to eat off-campus, be sure they account for the cost.
- Keep track of bank account balances. Many students fail to balance their checkbooks and miss transactions that remove money from their account. By keeping close track of their balances, they will know if they can spend money on the latest DVD or clothes.
- Choose the right credit card. A credit card can be a curse or a blessing depending on how students use it. For the card to be a blessing, encourage students to build a good credit score by sticking to a budget and paying the account in full each month. Encourage them to look for low interest rates, no annual fees, and reward programs. Let students know that a credit card becomes a curse for those who fall into credit companies’ traps such as high spending limits to lure customers into spending money they don’t have, leaving them in debt with interest rates guaranteed only to increase the debt. Help students decide which card that suits their needs best.
Many students fear that keeping to a strict budget will prevent them from enjoying college social life. However, the college provides many free (or very cheap) options for students to enjoy including tickets to Memphis Grizzlies games, special viewings of newly-released movies, and even five course dinners at the refectory. Students who manage their money properly create good credit ratings, avoid debt, and find alternatives to spending money while still enjoying themselves.