In the past credit card companies have been able to set up booths around colleges and universities nationwide and offer free giveaways to those who are willing to sign up for a credit card.
This is much like you see at a Major League Baseball game or at the county fair.
“Sign up today and we’ll give you a shirt.” (or some other piece of junk you do not need.)
Now the Credit Card Accountability, Responsibility and Disclosure Act stops such action from credit card companies.
The act means that credit card companies, if marketing on campus, cannot offer free goods. It also requires consumers ages 18-21 to prove they earn enough to pay the credit card bill, or be force to have a co-signer.
The issue is that students are not paying their credit card balances. According to Sallie Mae 82% of students did not pay their monthly balances in 2009. This lead to seniors graduating with an average of $4,100 in credit card debt.
So if you are a college student here are some tips for finding the best credit cards.
- Find Cards with No Fees: You do not need to pay any monthly or annual fees in order to have a credit card. You also shouldn’t have to pay to open the credit card.
- Be sure they have online access to check your account: Use this access to track your purchases, if any hidden fees pop up and you are charged you will be able to deal with that issue immediately.
- Do not sign up because of a “Free Gift”: Sign up because of the benefits of the credit card and the benefits of building strong credit. If you need a new shirt or iPod shuffle just go buy one.
- Ask about any extra fees there are with the credit card: Sometimes credit companies include extra fees for certain things related to payments, missed payments, grace periods etc. Be sure to ask about these fees. They are in the fine print, but they should tell if you ask.
Be wise about picking out the right credit card. Credit cards can benefit your or hurt you so do your research and make good decisions.
Check out different types of credit cards here.