Many students are bombarded with a variety of credit card offers and advice, but it can be difficult to weed out the good information from the bad. Some people preach that credit cards are evil and that there is no need for a student to have one. Other people say that every person over the age of 18 needs to have a credit card. So which is correct? Should students have a credit card or not?

First, I should mention that due to some fairly recent changes, students can no longer obtain a credit card without either a) proof of income or b) a cosigner. This ensures that students cannot get into too much debt without a means to pay for it. While for parents, it can be scary giving your child a card, here are some ways students can benefit from having a credit card.

Why credit cards can be beneficial

• To learn responsible spending – This is the most important part of having a credit card. Credit cards get a lot of negative attention because of debt, but if students learn responsible habits early, the negative effects are 100% avoidable. A student’s first card should have a low limit, and be paid off on-time every month (not just paying the minimum). Prepaid cards are great because there’s only a set amount the student can spend. By establishing good habits early, students can actually benefit from having a card, which brings me to my next point…
• To build credit – Building credit is extremely helpful for students later on in life. Having a strong (and lengthy) credit history can set students up for their post graduation lives. With good credit, students can obtain student loans at lower rates, finance new cars, and even buy a house. (Note: Debit cards do not build credit. While they do help students become financially responsible, they are not a line of credit like a traditional credit card.)
• To use in an emergency – Credit cards can come in handy when you’re in a bind. If you have an emergency (such as running out of gas), credit cards can be a lifesaver. Plus, for students who travel a lot or plan to go abroad, they are a great safety net for unexpected travel issues.

Why credit cards can be dangerous

• The temptation to spend is greater than it is with cash. It is much easier to swipe a piece of plastic than it is to hand over a pile of bills.
• Missing a payment or building up too much debt can seriously harm your credit score.
• You could develop bad spending habits at a young age.

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What it boils down to is that as long as you exercise self-control, and spend only what you can afford to spend, having a credit card is actually a good thing. If you are someone who cannot exercise spending restraint then having a credit card could hurt you. Credit cards are not inherently bad, and when used properly, can help students get through the college years and emerge financially strong with a solid credit background.

Opening a Student Bank Account

Many college students will open their first bank account just as they leave for campus.  Others have had bank accounts since they were kids.  Student banking may be a new concept to you, or you may have had a bank account for quite a while. Either way a student bank account is essential for managing your money and for the transfer of your grant or student loans funds. There are a number of key aspects to think about when choosing your bank and how to use it effectively. Read more for all you need to know about banking.

Considerations for a student bank Account

What are the typical considerations for Student Banking or when opening a new account?  There are many.  The first place to start would be by asking an adult, counselor or financial aid officer.  Otherwise, visit a number of websites offering online banking services.  Once you have some general information, walk into your local bank and ask for advice from there team.

In general, most student simply need a checking account.  If you have savings or additional cash, you may consider a savngs account which will earn you interest on the amount deposited.  A CD or Money Market account might pay you more interest on your savings but may also have some string attached.

For more information, visit: Student Banking from StudentPlatinum.com

For loans (including private student loans), student credit cards or investments that involve compounding interest, there are two popular interest rate related terms.

Annual Percentage Rate, or APR, is a measure of how much interest will be on an annual basis without taking into account compound interest.

Annual Percentage Yield, or APY, is the same interest rate measure, but accounts for compound interest – a better measure of how much you will actually pay in interest. Banks and credit card issuers often express credit card interest rates in APR, in order to better hide just how much interest would cost.

Learn more, Read:

What is the difference between APR and APY?

Thanks to the credit crunch, the recent economic recession and the rising cost of education, student debt is more prevalent than ever. Between credit cards and student loans, many graduating seniors will have as much as $50,000 to $60,000 in debt that has to be repaid.

Here are a few strategies that can be used separately or together to curb your debt and get you on track to financial stability and better quality of life.

1) Get a free debt consultation.

There are tons of services such as Credit.com’s free debt consultation service that match you up with a licensed and certified financial professional. We always recommend that you consult with an industry professional because they will know all options available to help you get control of your debt.

2) Budget, budget, budget!

While most of us have a negative knee-jerk reaction to the word “budget”, the truth is it is ESSENTIAL to managing and reducing debt. Even something as simple as plotting out how much money you are willing to spend on basics like food and entertainment can free up a surprising amount of money in a month to go toward your debt.

To give a quick example, I recently decided that I would buy lunch no more than 3 times per week (I usually buy every day.) I’ve already saved about $50 per week (more if you don’t count groceries) — that’s $200+ a month!

3) Make small overpayments directly to principal.

If you aren’t familiar with loan jargon, “principal” is the physical amount of money you borrowed. Interest is figured out based on how much principal you have remaining, multiplied by the interest rate.

Thus, if you pay more than your minimum, the raw total the interest is based on goes down quicker and you pay less money overall. It’s a win-win.

Note — always specify that you want extra money going directly to principal. Otherwise, some banks will sneakily apply it to “future interest” and you won’t be slimming down your payments like you want to.

If you’re 18 or older, odds are you’ve received at least one student credit card offer in the mail. Often times, the bright colors on the packaging and awesome-sounding introductory APR can blind us to the fact that maybe it isn’t exactly what we’re looking for in a credit card or that we don’t need credit at this very moment. (more…)

Did you know that StudentPlatinum has a credit education center with over 15 articles on various credit and student credit topics?

We’ve done the legwork to make sure the information presented to you is accurate, practical and useful for everyday life. No deceptive practices, no sketchy content. (more…)

According to the Free Financial Dictionary, credit score is defined as,

A credit score is a numerical expression based on a statistical analysis of a person’s credit files, to represent the creditworthiness of that person, which is the perceived likelihood that the person will pay debts in a timely manner. A credit score is primarily based oncredit report information, typically sourced from credit bureaus / credit reference agencies.

In laymen’s terms, a credit score is an at-a-glance measure of risk for banks. The higher the number, the less risky you are to lend to or be given the ability to charge purchases to a line of credit. (more…)

If you’re in the market for a credit card – be it your first or not – the complexity of picking one can be overwhelming and pretty confusing. There are tons of different features and benefits in play such as Purchases APR, Balance Transfer APR, annual fee, cashback, etc.

Let’s outline a few basic rules to make the process easier and less stressful for you. (more…)

Hey there summer boys and girls! The heat is in full swing up here in Boston so if you are looking for something to do inside, consider checking your credit for free.

Did you know that every private student loan requires a good credit score and stable history? Even things like renting an apartment, buying a car or getting a cellphone can require credit to be approved. Therefore, it’s really important to keep on top of your score and make sure you are free of fraud and delinquency on your accounts.

So pull up a chair, bask in that amazing air conditioning (you know it feels good!) and head over to FreeCreditScore.com. Make sure that all your cards are listed properly and nothing appears that you don’t own. If you have any questions about credit once you get there, head over to Student Platinum’s Credit Education Center to learn more!

Check your credit for free! »

After you’ve checked your credit, head over to ScholarshipPoints and redeem this code for 25 scholarship points: FREECREDITYAY

It is extremely important to make sure your credit card payments are made on time.  A late payment can lead to additional charges and a dip in your credit score. It’s true! Part of your credit rating is based on your ability to make payments on time, and even one late payment can hinder your ability to take out a mortgage or finance a car in the long-term.

Here are some easy ways to ensure you never miss a credit card payment.

Use automatic bill pay. Imagine being able to pay your bills without having to lift a finger. It’s possible. If your bank allows you to set up an automatic bill pay, use it. You set the date each month and your bank automatically deducts the amount you wish to pay.

Set an alert for when you will pay your bills. You don’t need a full planner to keep track of bills. It’s very easy to set up an alert on your phone or email to remind you when you need to pay online or mail out a check. For example, Google Calendar lets you set up an alert that will send you an email or text message on the day you want to make a payment.

Dispute unfair charges. If you are unjustly penalized for a late payment, you can dispute it. The first thing you will need is documentation. Print out bank statements or credit records and take note of the dates. The best evidence you can provide is a printed copy of an online pay receipt. If you pay your bill online, you will often get an email from the bank’s website telling you when you have submitted a payment. Print this page out and keep a folder handy to log all of your payments.