College students and Debt

Do college students really need to establish credit before graduating?

It may sound simple to answer the question with a yes. The reason being that prospective employers may look at a credit history.

But what will your credit history show?

Many college students get at least one credit card. They are given many applications from various banks and credit card companies. It can be tempting. College students are generally broke, but want cash to spend.

Here's the problem. If you get a credit card with a $5,000 limit, and you max that out, what does that say about you? Just having credit is not the full story. The better question is how responsible you are with it. A college student that has $50,000 in student loan debt, and then thousands of credit card debt, may not look as attractive as another job applicant.

If you are one of these college graduates, and you are up against someone else who does not have debt, their record may look better than yours.

If your credit has made your financial situation worse, then having a credit card really did nothing for you.

Having no credit is far better than having bad credit. Know the difference. This means that you do not need to have a balance on your credit card. Having a credit card with no balance shows you have credit, but are not one to use it frivolously.

College graduates need to manage their credit wisely. That's what your employer will look at.

College students are better off using a debit card for everyday minor purchases.

Borrow only the amount of money you need to complete your education. Many college students get caught up in spending sprees and charging a lot of extra curricular activities.

It's not about have loads of credit. It's about using it and managing it wisely.

>More information on college students and credit cards.

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