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College Student Credit Mistakes

Tom Gilmour -- Tips to help you plan smart and think ahead so you don't end your college education with financial difficulties.

College students are faced with many difficult financial decisions. As young adults facing the future, financial organization is a high priority. Deciding how to pay for college, earn spending money, and still get a good education are common concerns for young students. This can often be a hard goal to achieve, with students paying long-term and costly money mistakes. Unfortunately, these mistakes can cause damage that will linger for years to come. By planning smart and thinking ahead, students entering college can take measures to ensure they do not end their years of education with financial difficulties.

Credit card debt

Credit cards have become a way of life. They make paying for things quick and easy and even offer rewards and cash back bonus programs. The problem is that these appealing conveniences have overshadowed the drawbacks of the use of credit cards. Most cards have unfavorable terms and high interest rates. Plus, unless purchases are monitored, these cards will also allow students to spend more money than they actually have.

Requesting credit score

Along with the dangers of credit card debt, college students also end up damaging their credit history by making poor decisions. Missed payments and other negative marks will remain on your credit history for years, affecting your credit score. College years are not a time to be careless with finances, as these are the building years for future credit. An important rule for credit cards and loans is to ensure that the payments are always made on time.

Lack of budgeting

A budget is an excellent tool for students. College is a time of preparation for adult responsibilities. Practicing financial discipline during these years will benefit in the long term. It is easy to be complacent without the pressures of having kids to feed, a mortgage to pay, or other significant money worries but college students often operate on a limited income. It can be easy to lose sight of where the money is going if expenses are not properly tracked.

Inappropriate use of student loan money

Many college students rely on student loans to cover tuition costs and living expenses. College tuition rates increase frequently and in addition to family support, the supplemental funds are often necessary. It's one thing to use student loans on school expenses such as books and activity fees, but purchases unrelated to education and necessities should be obtained through other means. A private student loan for college may seem easy to pay off once you finish school and get a job but this is not always how things work out.

Attending an expensive college

You might dream of going to a prestigious school but this might not be your best financial decision. Getting a private student loan for college can be a consideration to cover shortfalls in financing and there are low interest options available through the Stafford loan subsidies as well. It is important that a family flush out several financing scenarios.

Tom writes for the best credit union in PA, Bucks First FCU. In addition to offering members private student loans for college, they help students learn good financial habits and provide financial consulting help when asked. If you are having financial troubles, it is best to get financial consulting help as soon as possible. Join the best credit union in PA, learn how to handle credit cards with rewards and bonus programs and in the long run, maintain or improve your credit report.

© 2014 Tom Gilmour

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