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ICBA Encourages Students to Establish Responsible Credit Habits
By James Comtois
College students use credit cards for everything from books and food to tuition and supplies. Since most of today's college students use credit cards and since establishing good credit early will enable students to buy homes when they leave the world of academia, the Independent Community Bankers of America is encouraging the responsible use of credit cards as one way to help establish good credit.
The ICBA represents a constituency of community banks of all sizes and charter types in the nation and is dedicated to representing the interests of the community banking industry.
Recent research conducted by college loan lender Nellie Mae shows that 74% of college students said they use credit cards for school supplies, 71% use credit cards for textbooks and for food, and 24% use credit cards for tuition. Credit cards are a convenience and must be used properly. A good credit card track record starts with a good credit card.
The ICBA offers students the following tips to help students use credit cards wisely so they can establish good credit:
- Students should set up and follow a budget that includes paying off a credit card balance. "Maxing out" or charging up to the card's credit limit can make sticking to a budget more difficult.
- Unlike purchases, cash advances generally have finance and interest charges that apply immediately.
- Cards should be paid on time, every time.
- If a student moves, they should notify their card issuer immediately and consider paying online to ensure payments are received by the monthly due date.
- Records of the account number, expiration date and phone number of the card issuer should be kept in a safe place.
- Students should routinely access their account information online to track spending and to quickly identify any fraudulent transactions. If a student sees a transaction that is not theirs, they should immediately notify their bank.
- When making online transactions, students should be sure the site is secure and not let others see them enter card information.
- Credit cards shouldn't be lent out to anyone for any reason.
- Account information should be kept confidential. Credit card numbers or expiration dates should never be given out over the phone, unless the call has been initiated and the student knows who he or she is dealing with.
- A copy of the sales receipts should be kept so that charges on the bill can be compared.
- If there's an error, it should be reported immediately by notifying the card issuer.
- Monthly statements should be opened promptly and notices or messages from the card issuer should be read carefully.
The ICBA also recommends that students shop around for rates and terms that are favorable and to remember to check with local community banks.
"Understanding how to use consumer credit wisely gives young adults the foundation to establish good credit that will serve them well when they are ready to buy a home," said Terry Jorde, ICBA chairman and president and CEO of CountryBank USA.
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