Gaining financial freedom is a large part of going off to college, but most of that freedom comes in the form of debt. According to Sallie Mae, as of 2009, 84 percent of undergraduate students had at least one credit card; 17 percent paid off the balance monthly, and the other students accrued finance charges or other fees the card company deemed appropriate.
Websites that help college students obtain credit cards are abundant. A simple Internet search shows millions of results focused on the college student, many suggesting ease and aid to first-time student applicants for a specific card offering. College campuses around the world allow credit-card applications to be placed in common areas where students gather. Those requesting a credit card for the first time should research their options thoroughly before applying.
Research the benefits of a card company's offerings; match them to the student's financial situation. Will the student be able to pay off the balance each month? If so, the finance-charge percentage is not applicable, as none will apply with a paid balance. If a balance will be carried, look for a card with a low percentage rate, and get acquainted with late fees and over-the-limit terms. Knowing the consequences of carrying a balance will help determine how much credit a student should accept, what balance to carry, and the reality of what is affordable overall.
Using a credit card for the first time is an eye-opening experience. At the end of the first billing cycle, review the statement for charges to ensure they are correct; examine rates applied to your charges. If carrying a balance, determine which purchases made on the credit card could have been paid in cash or with a debit card, such as meals or coffee. For instance, if a $2 coffee is purchased on a credit card at 23 percent interest rate, the price will have jumped to $2.46 in the first month the balance remained and to $3.03 by the second month.