June 25, 2009
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News: Help For College Students
College students have been the target of credit card companies for a number of years. The aggressive marketing strategies of lenders have left many students starting off life after graduation with more than their extensive student loans. They find themselves buried in debt with maxed out credit cards. New rules and regulations have recently been signed into law that are aimed at helping students from falling into some of these traps. The law prohibits credit card companies from participating in aggressive marketing on college campuses and requires new students to participate in a financial management course upon entry into the college. The law can be confusing and while financial management courses will be offered to new students, what should current students do now to help manage debt. Students can follow some simple rules that will help.
First, follow the 30% rule. In other words, don't use more than 30% of your available credit card limit. It's becoming even more important that you keep your card balance low as credit card companies begin raising the minimum payment due. The newest move by card companies is their attempt at recouping losses they expect to experience due to new legislation restrictions which will prohibit them from imposing unfair fees. Raising the monthly minimums will make it more difficult for students to meet payment requirements and provide banks another opportunity to charge late fees.
If you find your bank has raised your interest rate even though you have been making payments as agreed and on time, call your credit card company and ask to speak with a manager. Sometimes rate increases are computer generated which does not look at your good payment history. Lastly, whenever possible, use your debit card or cash when shopping for everyday essentials. A good place to pick up staple products is the discount store that only accept debit or cash. Following these simple steps will help keep you out of trouble and start you off with a clean slate after graduation.