Credit and college students... sometimes they don’t mix

Who doesn't want to live the good life? Seeing others with nice possessions is not always easy. However, some get caught up in the life style of the rich and famous and quickly find out that life at the bottom is no picnic. Credit cards are a convenience for college students everywhere; however, keep in mind credit cards need to be paid off and it is not free money!

"I only have one credit card and use it in case of emergency," said junior Rachel Weyman. "I sat down and discussed this topic with my parents thoroughly before getting one. It is comforting to have something just in case you are in a bind and may need it."

According to The Pittsburgh Tribune-Review, Robert Manning, professor of humanities at Rochester Institute of Technology said, "You have the doctor's daughter and the bus driver's daughter rooming together and having a good time. Nobody wants to be left out, but when it comes time to pay the bills; one father can afford to pay a $10,000 credit card bill and one can't," he said. "People who would never have been given a dime in credit ten years ago can now have thousands of dollars," said the author of Credit Card Nation.

It is all too common that young adults are lured to engage in discounts or free giveaways, when in all reality, it is a way of getting students to come out, sign up for a credit card and then receive what is advertised. According to creditcard.com: "Be leery of on-campus or near-campus solicitations by credit card issuers and their representatives. There is no such thing as a free lunch, and in return for that "free" slice of pizza or sandwich, you might find yourself applying for a credit card you do not need and is not right for you."

The Pittsburgh Tribune-Review also states, nationally, four out of five college students have a credit card, and the average balance is $2,327, stated a recent study by the Nellie Mae foundation, one of the largest student loan associations.

According to freshman, Joel Ashton, "I only use my credit cards for things school-related, like purchasing my books each quarter. I had my mom place a $400 credit limit on my card."

A credit card is meant for an individual with an income that is capable of making the payment each month. Immaturity and lack of knowledge are just a few of the reasons that lead many young adults down that dark and unpleasant road.

The state of Georgia's Governor's Office of Consumer Affairs said, "Do you realize that, if you had a credit card balance of $7,000 and an interest rate of 18.9 percent, made no further charges to that account and paid the minimum balance every month, it would take you over 16 years to pay it off? Learning how to borrow responsibly and build a positive credit history could help you later in getting a job, buying a car, renting an apartment or buying a house."

"I do not have a credit card," said Senior Tim Wise. "I know it is good to begin establishing credit, however I feel students should only get them if they really need one… most students get them for all the wrong reasons. I am not educated about the topic, so why would I get something that I know nothing about?"

Nowadays credit card services and counseling are offered to college students, as well as topics such as the effects of debt and bankruptcy. "I was in debt by age 20," said OSU graduate Kim Breen. "I did not need a credit card, but kind of got it to fit in and keep up with others around me. Luckily, I [sought] help and got educated and overcame it. I was lucky."

Like most things in life, it usually is not in an individual's best interest to buy or partake in something you know little or nothing about. A lot of it boils down to common sense; however college can throw numerous things at young adults, many being foreign topics. Do not hesitate to ask for help, do your homework or use a service; because in the end it is your life and your future, no one else's. So let your hard studying pay off and don’t let your poor decisions cost you opportunities in the future.

Alternative Financing With Bad Credit Student Loans

Proven Strategies for Improving Your Credit and Getting the Money You Need

Credit, good or bad, is a reality when it comes time to plan your financial aid and student loan strategy.

Common myths about college students and credit:

* All students that go in search of student loans are fresh out of high school—just plain wrong. A growing population of students is well past high school, many working on second and third degrees, and professionals that return to school for career-related courses. All may qualify for student loans.
* Students have no credit history—again, wrong. Any student that has had a job and paid any type of bill or credit card has a credit history. Alternatively plenty of younger students could be affected by their credit history because they, ironically, have little to reflect their financial situation or attitudes. Adult students usually have plenty of credit history from which to draw conclusions, good or bad.
* Students must rely on parents’ credit—again any student, young or old with enough good credit can qualify themselves.
* Parents have good credit—really wrong. While some parents have good credit it’s really a mistake to assume that all do. Plenty of parents have poor and bad credit, making them totally inappropriate choices for co-signors or co-borrowers.

Good news: Bad credit, or no credit, is not a legitimate obstacle to a college education.

You may have to work a little bit harder to secure the financing, but you should never let bad credit stand in your way to an education.
Federal Student Loans: Perfect Bad Credit Loans

The federal student loans—Direct of FFEL--are hands down your first strategy when you must overcome bad credit. The subsidized and unsubsidized Stafford Loans may be utilized to your advantage in a number of ways. First these are the single most popular student loans and require no credit check at all to qualify for funds. The only federal loans that require a credit check are the Parent and Grad PLUS Loans—both non-need-based loans.

* Dependent students with high financial need may qualify for Stafford Loan limits that increase with each year of study.
* Independent students may receive almost double the financial amount as dependents.
* Parents, been turned down for a PLUS Loan based on credit? You could be a benefit to your child—he or she could be approved for much more in Stafford Loan funds.
* Grad students and adult professionals may qualify for over $20,000 each year in low-interest Stafford Loans, without any credit check.

How to Get a Private Student Loan When You Have Poor Credit Scores

If for some reason you do not qualify for federal student loans or your financial award fails to cover your necessary college expenses, a private loan may be necessary. But how do you get past the dreaded credit check? You don’t.

Here’s how you plan for a private loan with bad credit:

All private student loans are credit-based whether they are for undergrads, grads, med students, law school loans or supplemental private loans that help you cover continuing education costs or even Bar Exam costs. It’s that simple—you’ve been informed. So armed with that knowledge what step can you take to be approved for a private loan?

Find a co-signor in advance who knows you, trusts you and is willing to sign a promissory note with you. Also make sure your co-signor has very good credit.

A co-signor does not have to be a parent or guardian; it can also be a good friend or a relative.
Leverage Student Loans to Improve Your Bad Credit

All student loans require you make repayments, which are key to your credit record. Here’s a strategy: make every student loan payment on time. Use co-signors to your advantage—to build up your credit. It’s easy: once you’ve made 48 consecutive on-time payments, it’s common for your lender to release the co-signor from the loan. After that you’re only building on your own credit, no one else’s.

**Tip: Ask your lender if they provide a co-signor release once you’ve made a certain number of on time payments.
Keep Your Credit History Ship-Shape

After college, when you’re out in the real world, and the bills begin piling up, continue to nurture your credit record. At the first sign of repayment woes, talk to your lender about a student consolidation loan.

We’ve given you some proven ways to overcome bad credit, work toward continuous improvement, and get the money you need to make college a reality.