BBB Urges College Students to use Caution with Credit Cards

As the new crop of students are college bound, the Better Business Bureau urges them to use caution when signing up for and using a credit card.

"For many of these students, this is the first time they are on their own, and many of them are untrained in the use - and abuse - of credit," said David Polino, President of the Better Business Bureau. "We urge students to be prudent with their budgets, and to take steps to insure they do not fall prey to aggressive lenders." Polino said.

Student bankruptcies are on the increase. In many cases credit card debt is adding to the already substantial financial loads for tuition, housing and materials.

It is easy for a young person, perhaps away from home for the first time, to succumb to the temptation of "easy money" through credit. It is difficult to find a student bulletin board on many campuses that does not contain at least one credit application. Lenders are also invited to some college campuses to recruit students for credit cards.

The BBB offers the following suggestions when considering a credit card offer:

• If you have a poor credit history or no credit history, be skeptical if you are offered a pre-approved credit card with no credit check.
• Be sure you understand the details regarding the payment plan, the annual interest, the annual fee and the credit limit.
• If you are not sure of this information, call the issuing company for a full explanation before accepting the card.
• Determine if it is for a general-purpose credit card or if there are limits on where you can purchase items using the card.
• Be sure to understand any difference in interest rate for cash advance over purchases.
• Understand that minimum payments made on some credit cards with a balance of $2,000 will NEVER be paid in full.
• Finally, and the BBB does not consider this old fashioned - Check with your parents.

This report is general in nature and not intended as a reliability report on any company, service or product.