Scholarship News

Why Credit Cards Don’t Deserve the Bad Rep


August 21, 2007
by Scholarships.com Staff
Depending on the hands it falls into, a credit card may serve as an ultra-convenient
    money stack, or it can—if I may be overly dramatic—lead to financial suicide. For
    those who can manage their expenses and pay their monthly balances in full, owning
    a credit card is a great idea. Walking around with large amounts of cash is dangerous,
    and buying online is quite a hassle a without a credit card. Emergencies that necessitate
    fast funding also come up, and when they do, a bit of debt pales in importance. As
    you probably know, building up a credit report is one of the biggest incentives
    for taking advantage of credit cards. Credit card companies know that many parents
    will take care of student debt, and they’re not shy about making application offers
    to students. Booths with pizza and t-shirt giveaways fill up campus corners and
    busy sidewalks on sunny days. According to CBS, the average student is offered eight
    credit cards during their first college semester—no job required. Once
    students graduate, they are less likely to receive financial backing from their
    parents. With new expenses and student loans kicking in, graduate fledglings are
    considered to be bigger liabilities to credit card companies. Ironically, just when
    credit cards become most important, they become most difficult to come by. Renting
    an apartment involves a credit check, as does taking out a car loan and a home mortgage.
    People with bare credit reports are big question marks to sellers, landlords and
    credit card companies. If there is little or no credit history on your report, you
    may find yourself staring at bigger bills or doorknockers. I’m not saying
    it’s impossible to make it without a credit card, but having one sure does help.
    Good track records with a national credit card such as Master Card, Visa, and Discover
    (lesser-known store cards may not contribute to credit ratings) give lenders some
    evidence of dependability. Unfortunately, many students have a hard time creating
    a positive track record, and therein lays the problem.  Students frequently
    look to credit cards for tempting pick-me-ups and tuition aid. Don’t get me wrong,
    not all indebted students are shopoholics, but those who look to credit cards for
    financial aid might want to look elsewhere.

Depending on the hands it falls into, a credit card may serve as an ultra-convenient money stack, or it can—if I may be overly dramatic—lead to financial suicide. For those who can manage their expenses and pay their monthly balances in full, owning a credit card is a great idea. Walking around with large amounts of cash is dangerous, and buying online is quite a hassle a without a credit card. Emergencies that necessitate fast funding also come up, and when they do, a bit of debt pales in importance. As you probably know, building up a credit report is one of the biggest incentives for taking advantage of credit cards. Credit card companies know that many parents will take care of student debt, and they’re not shy about making application offers to students. Booths with pizza and t-shirt giveaways fill up campus corners and busy sidewalks on sunny days. According to CBS, the average student is offered eight credit cards during their first college semester—no job required. Once students graduate, they are less likely to receive financial backing from their parents. With new expenses and student loans kicking in, graduate fledglings are considered to be bigger liabilities to credit card companies. Ironically, just when credit cards become most important, they become most difficult to come by. Renting an apartment involves a credit check, as does taking out a car loan and a home mortgage. People with bare credit reports are big question marks to sellers, landlords and credit card companies. If there is little or no credit history on your report, you may find yourself staring at bigger bills or doorknockers. I’m not saying it’s impossible to make it without a credit card, but having one sure does help. Good track records with a national credit card such as Master Card, Visa, and Discover (lesser-known store cards may not contribute to credit ratings) give lenders some evidence of dependability. Unfortunately, many students have a hard time creating a positive track record, and therein lays the problem. Students frequently look to credit cards for tempting pick-me-ups and tuition aid. Don’t get me wrong, not all indebted students are shopoholics, but those who look to credit cards for financial aid might want to look elsewhere.

Scholarships, grants, jobs and less expensive student loans are a student’s best bet because late payments may hurt in more ways than one. They will show up on credit reports, result in $20-$25 late bank fees, and lead to increases in credit card penalty charges. If you handle your credit card wisely, you won’t need to worry much about penalties and annual percentage fees, but you should definitely shop around before applying. Search for a card with the lowest fixed annual percentage rate (APR). Numerous cards will start you off with a low APR but raise the rate after 6 months. Also, be on the lookout for standard annual fees. There are cards that charge standard usage fees, regardless of payment history. Look for those that don’t. Once you build a good payment history, you may receive credit card offers galore. Little cards with your school logos may arrive in your mailbox. Yes. That’s cute. Chase knows that you go to the University of Illinois, but you already have a card. Refrain from getting another one. According to the United Marketing Service (UCMS), the average Joe carries 2.8 credit cards in his wallet: don’t be Joe. When you apply for a new card or loan, a credit inquiry will be recorded on your report. The more inquiries are made, the lower your credit score. I know, just because you want a discount on American Eagle jeans does not mean that you will not pay your bill in full. Unfortunately, lenders may assume that credit inquiries suggest financial need—even if they don’t. If you can stay on top of your expenses and limit the number of credit cards you own, you should take advantage of college application offers. As long as you can control the card before it takes control of you, using a credit card can bring you one step closer to a secure financial future.

College is expensive, Scholarships.com is completely free. Pay for your college education with as much free college scholarship money as possible. By applying to all the awards you qualify for, you can be sure to not miss a single opportunity in paying for your college expenses - including tuition, fees, room and board. Get matched to college scholarships instantly and start applying today by conducting a free college scholarship search at Scholarships.com.

Discuss

Share your thoughts and perhaps thousands of students will benefit from your unique insight on the subject!



If you can read this, don't touch the following fields


 
Facebook is returning to its roots with the launch of Facebook Campus, a college-only space designed to help students connect with fellow classmates over shared interests, according to the press release. The social media giant, which had originally started its life as a networking site for college students, is now refocusing its efforts on connecting students, particularly in the wake of COVID, even if they are away from college. Here's what you can expect from the new Facebook Campus platform if you are a college student:

Facebook Launches New College-Only Student Platform

September 15, 2020 3:30 PM
by Susan Dutca-Lovell
Facebook is returning to its roots with the launch of Facebook Campus, a college-only space designed to help students connect with fellow classmates over shared interests, according to the press
Today marks the 19th anniversary of the devastating September 11th terrorist attacks on the United States of America. We honor those who lost their lives in the attacks on the Twin Towers and the Pentagon, as well as the first responders who gave their lives rescuing survivors, and the passengers of Flight 93 who thwarted the hijacker’s plans. The events of September 11, 2001 touched the lives of all Americans and redefined a generation. Now, even in the midst of another national crisis, we feel it is appropriate to take the time to remember this tragedy.

Remembering 9/11

September 11, 2020 11:02 AM
by Izzy Hall
Today marks the 19th anniversary of the devastating September 11th terrorist attacks on the United States of America. We honor those who lost their lives in the attacks on the Twin Towers and the
Coronavirus has led many collegiate athletics leagues to cancel or postpone the fall 2020 college sports season. These cancellations affect more than just the players and coaches. Fans – both on and off campus – miss being spectators to high-energy competitive sports like college football that inspire school spirit and foster community. As a result, some schools are turning to competitive Esports to help fill the gap in their fall college athletics.

Missing Fall Athletics? Try Tuning in to College Esports

September 8, 2020 11:43 AM
by Izzy Hall
Coronavirus has led many collegiate athletics leagues to cancel or postpone the fall 2020 college sports season. These cancellations affect more than just the players and coaches. Fans – both on and
With many uncertainties surrounding back-to-school plans in the wake of the COVID-19 pandemic, high school and college students are relying more than ever before on increased support and resources in their college and scholarship search and application process. To help, Scholarships.com has put together a list of top Back-to-School Scholarships worth applying for during this extraordinary academic year. This list features scholarship opportunities that are ongoing despite the coronavirus pandemic. Be sure to also regularly check our Coronavirus News for Students section for the latest impacts on college and scholarships, here.

Top Back-to-School Scholarships 2020

September 4, 2020 1:36 PM
by Susan Dutca-Lovell
With many uncertainties surrounding back-to-school plans in the wake of the COVID-19 pandemic, high school and college students are relying more than ever before on increased support and resources in
As part of promoting safe living and social distancing on college campus this Fall 2020 semester in the wake of COVID-19, colleges and universities holding in-person classes have cut down on the number of students who can reside in the traditional college dorm. Many colleges have invited just a fraction of the class back to school and are altering traditional double and triple rooms into singles.  Because of this, there are students who would like to live on campus for the fall semester who cannot. Some students have taken to renting rooms at nearby hotels to capture some of that campus magic.

Hotels Make Room for Fall Students Amid Coronavirus

September 1, 2020 11:08 AM
by Izzy Hall
As part of promoting safe living and social distancing on college campus this Fall 2020 semester in the wake of COVID-19, colleges and universities holding in-person classes have cut down on the
The Common Application opened up for the 2020-2021 school year on August 1st. This one-stop application streamlines the college application process, allowing students to use a general form to apply to nearly 900 colleges and universities. One of the most essential elements of the Common App is the personal essay, where students craft thoughtful responses to one of seven essay questions. But this year it introduces a new free-response section for students (and their school counselors) to describe how the coronavirus pandemic has affected them and their education.

New COVID-19 Question Added to 2020-2021 Common App

August 27, 2020 10:53 AM
by Izzy Hall
The Common Application opened up for the 2020-2021 school year on August 1st. This one-stop application streamlines the college application process, allowing students to use a general form to apply