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Being a student is hard enough, with a demanding study schedule and the high cost of tuition. Plus you may be working a job in addition to taking on lots of credit hours in the classroom. Those circumstances, especially in today’s rather burdensome economic climate, are the last thing you need to balance on top of credit card problems. But credit cards have long been the go-to solution when financial problems become unsolvable. Plastic still represents the quickest and easiest way to borrow money from a bank, and when you’re in a pinch it’s a pretty painless way to get your hands on some credit or cold cash. Then you can move on with your life.
Of course life has a way of catching up with us in the end. When you’re a busy student 30 days can go by in a flash and the next thing you know your credit card bill arrives and you’re once again scrambling to make ends meet. You could just put off paying it for a week or so, similar to turning in an assignment to your professor late, but credit card companies could care less. They have every incentive to let you get into deep credit card debt. Miss just one deadline and it gives them a grand opportunity to make a whole lot of money by hitting you with huge fees, penalties and a much higher interest rate (default APR). Here are some tips to help you manage your plastic while you’re in school.
Online Account Management Tools
Since deadlines tend to sneak up on you and then make a whooshing sound as they fly by, it’s a great idea to remind yourself ahead of time to pay that bill. You may already use a similar strategy of setting your watch or clock a few minutes fast to make sure you get to classes on time.
Most credit card companies will let you set up a free online account with special payment deadline alerts. You just visit the preferences section of your account and choose
when and how to receive alerts and reminders. You may want to have them send you a text message, for instance, a week before your payment is due – and to also text you when your debt balance reaches a certain level. Then you can start setting aside money to make the payment so that it doesn’t catch you off guard.
The Parental Cosigner
If your parents are willing to help, that’s another avenue worth exploring. In fact you may have to, because Congress recently passed a law requiring that anyone under the age of 21 needs to demonstrate their ability to repay loans before they can be issued a credit card. Those under 21 now need an independent source of verifiable income, for instance. Without that kind of financial strength you will not be eligible for a full-fledged credit card without assistance from a qualified cardholder. Usually that’s a parent or guardian who is willing to cosign your account or add you to theirs.
While many students dislike that idea because they don’t want to be overly dependent on their parents and don’t want their parents seeing their charges, it’s still a plan worth considering. If you need a little extra time to pay back your parents they will likely be more understanding and sympathetic than a credit card company, and missing a payment deadline with your parents won’t result in excessive fines and a dramatic interest rate hike.
Prepaid Credit Cards
You may also be interested in prepaid plastic. It will be accepted just like a normal credit card, but your purchases must be backed up by cash deposits ahead of time. That’s because there is no credit available on the card until you put money into your prepaid card account. Then, once you have charged enough purchases or made enough cash withdrawals to drain those funds, the card stops working until you “recharge” it with another cash deposit. The biggest advantage of prepaid cards is that you can qualify for them even if you have terrible credit and no proof of income. The downside, however, is that fees charged by the majority of prepaid card issuers are extremely high (they have to make money somehow). Be sure to do your research because some of them are, in fact, are a total swindle.
In the recent past some prepaid cards were considered such a complete a rip-off that they were deemed “predatory” by consumer watchdog groups. You may have heard, for instance, about the prepaid plastic the Kardarshian sisters tried to launch. They were forced to cancel the card before it got off the ground because it got slammed by critics (including many government officials) for being ridiculously expensive.
*Editorial Note: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are the author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.