Tips to Avoid Spring Credit-Card Pitfalls

Spring can spell trouble for college students' credit-card balances. Spring-break expenses for items such as hotel rooms, plane tickets and cruises can lure students to overspend with their credit cards.

USA Funds^®' financial-literacy program, Life Skills^SM, provides financial-aid administrators with tips to share with students to help them avoid racking up unmanagable credit-card debt — and developing a poor credit-card rating — this spring.

1. Replace revolving credit cards with a card that requires you to pay off the entire balance each month.
2. Replace a credit card with a banking debit card.
3. Re-examine your wants-versus-needs list before charging anything.
4. Look for a card with the lowest interest rate. Find out how interest is calculated on your account.
5. Investigate any hidden fees associated with your credit cards.
6. If you can't pay your entire credit card balance every month, it's time to put your card away.
7. Pay attention to the fine print, including potential late-payment fees and interest-rate changes.
8. Find out when the interest on your credit card starts adding up.

Financial-aid administrators also can remind students of the following additional information that Life Skills provides regarding the hazards of unwise credit-card use:

• Using credit cards is a form of borrowing money, so using them for cash advances is a very expensive practice.
• The ramifications of bad credit can include paying high interest rates and being turned down for a job.
• Two-thirds of students who withdraw from school do so for financial reasons, often because they have racked up so much credit-card debt that they must leave school to get a full-time job and pay off the debt.

For more information about smart credit-card use to share with your students, and to learn more about Life Skills, contact your USA Funds debt-management consultant.