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and a high interest rate. These limits are met effortlessly, and the interest leads to increased monthly payments. Even more dangerous are the introductory rate offers in which the interest is raised drastically after a certain number of months. The unexpected rise on payments can prove to be trouble for someone with low funds.

3). They don't understand the long-term commitment and consequences.

Understanding how the credit system works is imperative for college kids. Not researching how to build and maintain healthy credit scores and how it will effect possible expenditures in the future is the most common mistake made by young people. Many people find that after they graduate, their entry level salaries make it hard to pay both their credit card and student loan bills, and they have no opportunity to save money. Starting out your career loads of debt and financial instability is discouraging, and it usually takes years until they can reach financial security.

There are many pros and cons of equipping college students with credit cards. While many may not be ready for the responsibility of owning one, others rely on credit as a means of living. The most important thing to remember is to educate students on the dangers and benefits of the credit system and to make sure they fully understand the commitment they are making to their financial future by using one.

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