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

It’s not exactly a secret that trying to build credit as a student is like power washing a house with toothbrush. There are a lot of hurdles, but having an established credit history is absolutely crucial for pretty much every big life event in the book.

For instance, did you know that in many cases you need to pass a credit check to rent an apartment? Or that for pricier cell phone carriers like Verizon, you need credit just to start a contract? (more…)

If I learned anything during my four years in school, semi-obsessive personal finance is definitely among the finalists. If you think about it, you have relatively low income (or none) and constantly are juggling any number of expenses that have to be paid from textbooks to feeding yourself.

Now that I have graduated, the components have changed but the game remains the same. To this end, I thought it might be helpful to explain why Mint.com worked for me and how you can use the service to keep tabs on your personal finances. (more…)

Earlier this year, I wrote a post on saving large amounts of cash while in college. Believe it or not, it is possible to make it through four years or college without living entirely off Ramen noodles. Here are some more tips that could lead to big savings:

Let your bank help you. Almost every bank and credit union nowadays is coming up with ways to help customers save money. The mentality is, the more you save, the more likely you are to remain as a customer. So take advantage! If your debit card offers cash back rewards, use it! If your bank deposits a certain amount from checking to savings every month, sign up for it. These promotions are there for a reason, and can save you a solid chunk of change every month.

Adjust your tax withholding. A lot of people claim 0 or 1 on their taxes. Truth be told, most people can claim more exemptions than that. By doing so, you will earn more in your weekly paycheck. Now keep in mind, this means you will have a substantially lower tax return, and you can only claim legal exemptions. But if you have found your self living paycheck-to-paycheck, earning more in the short-term won’t hurt.

Eat healthy. Oh, the freshman 15. Not good times. Bad times. You’re away from home for the first time, and finally – finally!- you can live out your dream of eating pizza every night of the week. It’s a noble goal, but one that won’t do much for your health or your wallet. Want to save money? Adapt to a diet. Get acquainted with your dining hall salad bar. Many campuses offer vegetarian options that are healthy and can save you from running up a huge fast food tab.

Get a scholarship! Just because you’re in college doesn’t mean you couldn’t use a little extra money. Sign up for www.ScholarshipPoints.com today for your chance to win a monthly $1,000 scholarship! Here’s a bonus code to get started: SAVINGS2

In your daily travels, perhaps you have seen signs in bank windows advertising, “12 Month CDs 2.8%!” To those without a background in banking or strangers to saving money, it might look and sound like gibberish. Let’s dispel the confusion and go over what a certificate of deposit is and how it works.

What is a CD?

A CD is a savings tool. Simply put, it is a way of stashing away money for months at a time to earn more interest than you would in a traditional savings account. You’re basically giving up your right to access the money for the length of the account to get a high interest rate on money you wouldn’t need to touch right away. (more…)

When I was in college, I bought my first laptop using a financing option. The terms of the agreement stipulated that if I paid off the balance in six months and make at least the minimum monthly payments, I wouldn’t be charged any interest. Perfect, I thought. I’ll put a little aside each month and in six months, the laptop is mine. Like any good American, I became complacent and kind of ignored the bill.

About three months in, I forgot about it all together, and didn’t look into the charge until the end of the six month period.  Because I didn’t read the fine print, I didn’t realize that missing a payment, or even being late on a payment meant the no-interest financing deal was off, and I was immediately charged the full six months of interest.

That’s the dirty little secret about no-interest financing. It’s incredibly fickle. There is no margin for error. Not only that, but the interest rate jumps from a wonderful zero percent, to a wallet-crushing 20% or more. After that expensive lesson, I still take advantage of no-interest financing, but now I set up automatic bill pay. If you are going to take advantage of a seemingly great financing offer, I suggest you do the same.

If you are attending college for the first time in the fall, you have probably been inundated with a list of items you need to buy before your folks drop you off at the dorms, from a laptop to a shower caddy. Well, here is the opposite of that list. Here are some things you will be tempted to pay for in college – but shouldn’t.

New Books at the Bookstore – During my entire freshman year in college, I bought all of my books at my school’s bookstore. I spent a little over $1,000. After that, a friend introduced me to Half.com. From then on, the most I ever spent in a semester was $150.  The point is, there are so many options out there for finding the textbooks you need, that you should consider your college bookstore like a last resort. Check out Half.com, Amazon.com, or even eBay. Ask your professor if she keeps one on hold at the school library. Speak with a couple of classmates to see if they are interested in sharing a book.

All of these are better options than the school bookstore.

Writing Services – Regardless of your major, you’re going to have to do a lot of writing in college. You will also see a number of ads from “writing professionals” who want to lend you a helping hand. Do. Not. Bother. First and foremost, having someone do your work for you is unethical. You and/or your family are paying a lot of money for you to get an education, not to have some hustler do your work. Second, it’s astronomically stupid. Many professors are wise to these services and all it takes is a hint of suspicion and a quick Google search and you will be busted. These days, many colleges and universities have zero-tolerance academic honesty policies. It’s just not worth it. Write your own paper.

Fast Food – You will be tempted as a student to simply spring for a burrito and a Coke every night. Don’t. While it’s okay to cheat every so often (I used to allow myself fast food on Friday and Saturday, and either cooked or visited the dining hall every other day), if you become a regular at your area Burger King, you’re going to get a head start on your Freshman 15, and the only thing you will have that’s skinny is your wallet.

Credit Card fees – If you elect to get a credit card for school, be responsible. Set up automatic billing so you don’t miss a payment and get hit with a late fee.

ScholarshipPoints code: NOSPEND

One of the nice things about having a credit card is the perks. Card companies love to offer incentives to customers so they will use their cards more. Two of the most popular – and useful for customers – are cash back and rewards points programs. Which program works best for college students? Let’s break them down.

CASH BACK: Cash back programs allow you to earn cash based upon a percentage of your daily charges. For most cards it’s a flat rate; for others you can earn more or less depending on what type of purchase you’re making. My card, for example, lets me earn up to 5% cash back on gas. (A nice bonus if you’re planning a road trip.) Other cards allow you to earn more cash back for things like groceries or using your card at certain stores.

REWARDS POINTS: Points programs earn you a specific number of points for every dollar you spend. Those points can then be used almost like a gift card at certain stores designated by your card company. One of the most common types of rewards points programs are airline miles cards. (I would highly recommend this if you are going far away to school and will need to fly home a couple of times per year.)

So which is best for you? Obviously, cash back offers you more freedom. Unlike rewards points, you can use your savings pretty much anywhere, or to pay off some of your balance. It’s like getting a small discount every time you shop.

Conversely, rewards points typically give you more since they are targeted toward certain stores. If your card is partnered with a specific department store, both the card and the department store will want you shopping there.

I would personally stick with cash back if you are planning to make a bunch of small purchases at many different locations. Even if you’re only getting 1% cash back every time you use it, it can still add up.

However, if you know the stores where you plan to shop, and those businesses coincide with your credit card rewards partners, you might be better off using a points program. As I said before, if you plan to fly a couple of times per year (either to go home or on spring break), then I would recommend an airline miles card. A friend of mine went to school in Boston, but lived out in California. She used her card enough where her flights were almost all paid for by the time her junior year came around.  NOTE: Some cards have expiration dates for rewards points and airline miles. Always check these first.

Also, remember cash back and rewards points are based on your use of the card. If you use the card too much and can’t make your payments, the impending interest you will owe could render any points or cash moot. So be careful!

ScholarshipPoints code: CASHREWARDS

Image credit: pfreviews on Flickr

If you’re a high school senior, then for a while now and over the next few months, you’re going to be seeing and hearing a lot about the cost of college. From student loans to scholarships, it can be a lot to take in. While paying for tuition, housing fees, etc. is obviously top priority, don’t forget that you are going to want to have a little extra spending money as well, especially if you’re planning to move away from home and live on campus.

Freshman year at college is a great opportunity to learn the value of a dollar and take your first few steps into the real world. If you’re not sure if you will have a job in college, you might be a little worried about walking around with an empty wallet, and that’s why you should start saving today.

Living on campus can be costly and so you should take precautions now to build up a nice little nest egg by the time the fall rolls around. Here are some easy ways to do that:

1. Open a savings account. Lets say you have a part time job that pays $150/week. If you could place $50 of that into savings, by September 1, you will have $1,000 saved up, with possibly a few extra bucks interest. Over the spring and summer, look for ways to continue feeding that account, from allowance money to high school graduation gifts.

2. Win scholarships. If you have access to a computer, you have access to tens of thousands of dollars in scholarship money available to high school seniors coast to coast. Simply visit ScholarshipPoints.com, where you can earn points for a chance to win scholarship money just by reading blog posts and completing activities. In fact, just for reading this blog post, we’ll give you 15 points to get started. Simply visit that link and enter the code: SAVENOW.

3. Find a student credit card. Now is as good a time as any to get your first credit card. Think of the expenses you pay for regularly – gas money, cell phone bill, going to the movies. If you pay for these with a credit card, and pay them off each month, you can not only begin to grow a credit score, but you can often get cash back savings and reward points. Get started with your credit card today!