by Vincent Maxwell

Created on: October 09, 2009

When most people hear the mere mention of a credit card company, their mind begins to race with ideas of greedy corporations willing to do anything to make money. People think back to their own personal credit card experiences and usually find a lesson of high interest rates and headaches. Now these ideas are not false; of course they want you at the highest interest rate, and to use the card until it melts; but there is absolutely nothing they can do that makes you. The reason most people do not want credit cards in the hands of college students is because they realize how tough the lesson is that comes with them. When it comes to credit cards, there is virtually nothing taught in schools about managing them, the only real way people learn is by getting one.

Now imagine a young twenty year old student, going to school and working part time. They make enough money to get by, all the while focusing primarily on their studies. In the mail arrives a credit card, something they have really no experience with. The words PRE-APPROVED and 500 dollar limit excite their minds as images of a new TV and clothes cloud their vision. Until this point the most they have had to deal with credit has been getting a student loan, maybe even a car.

Two months later the same student is worried about their 500 dollar balance, and how they are barely able to finish the payments. It takes the student another three years of slowly making payments to get the balance to zero. Obviously not all first time credit cards are handled like this, but unfortunately a lot are. It is with this financial slap in the face that most of us learn to be responsible with our credit. Its a lesson that is better learned in college, because there is nothing you can do to your credit that can't be healed with time. If someone completely ruins their credit at age 20, by the time they are about 27 their record will be clean.

So let's say the student waited until a little farther in life to get that credit card. The problem is they still have no real knowledge about how to use a credit card. There still hasn't been anything that has taught them about how they work; there is one key difference however. The student has a job now in their specific field making 80,000 dollars a year. They have car loans and mortgages, and its now they open the pre-approved letter. Except its different this time because with the mortgage and large income the limit is 20,000 dollars. With the student's financial record the pre-approved cards continue to fill the mailbox. Two months later the cards are maxed out, and even with a high income the payments are hard to meet. You can see how this situation is less than ideal.

The point is that without the right education on how credit works, most people find out with stories similar to these scenarios. Credit cards aren't like cigarettes or alcohol, something that is bad no matter what and should be kept from the youth as long as possible. It is something that takes practice to master, and can really open up doors in life when used properly. It could give you the extra credit score boost to get that lower mortgage interest, or even the buying power to invest in a once in a life time opportunity, We should not try to hide the entire college population from credit cards, but instead open the door and educate them on how they work. Show them from our mistakes the best way to approach that piece of mail. When they graduate college they will truly be ready for the real world of credit.

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