Smart Ways to Get Into Debt

Many college students leave school with a mounting debt that will take them years to repay. Not only are they now responsible for paying off their student loans, but they are also responsible for any credit card debt they may have racked up while in college as well.

There are a few things students will want to keep in mind while racking up that debt. One of the first things you need to remember is that it is not free money. It has to be paid back, and paid back on time – otherwise you will not only end up with lots of debt, but bad credit as well. Many credit card companies offer some sort of free gift when you sign up. This is their way of enticing you to put your credit in their hands. Whatever the free gift is, know that you will pay it back tenfold with interest and fees over the life of the card.

Know also that there is a difference between debit and credit cards. Credit cards will hold a balance for you to pay off, whereas debit cards will take the amount directly from your checking or savings account.  Check your interest rates on the cards. Many cards will offer low, low rates – as compared to some of your higher rate cards at 20-30% interest. Read over the information they give you carefully so that you are familiar with any kind of fee they have the right to charge you. Whether it is a late check fee, bounced check fee, or even an annual fee, know your fees.  ■