Student Advertising

• Creditors actively target college students for credit card accounts because they tend to be naïve and don't have many financial obligations. A 2008 study by the Public Research Group found that 76 percent of college students see marketing from credit card companies at tables on campus. Many offer small gifts as incentives to open an account. Credit card companies know students are not always knowledgeable about debt and money management, so it is often simple to attract them as customers. These creditors may also offer students accounts at unfavorable terms that make the debt difficult to manage. Knowing the financial motivations behind credit card advertising campaigns may convince a student to think twice before accepting a credit card offer.
  
  

Highest Rates

• Another truth that students should know is credit cards commonly carry the highest interest rates compared to other types of debts. Credit card rates often run as high as 25 to 30 percent in some cases. Although the introductory rate on a card is commonly low, if the student misses one or more payments the rate can increase --- sometimes as much as double or triple the initial level.
  
  

Limit Increases

• It is common for a credit card company to increase the credit limit over time when the student approaches his present limit. If the bank notices that the student makes her minimum payments on time each month, it might raise the limit. But a higher credit limit can actually hurt the student financially over time. As Bill Hardekopf, the CEO of a credit card website, says, "If you are a spender and the temptation is there to spend more than what you can really afford, (a higher credit card limit) can send you into the debt spiral."
  
  

Choose a Loan Instead

• If you have no money to pay your student tuition and need to borrow, do not place your tuition bill on a credit card. Seek a federal or private student loan instead. These loans commonly come with low fixed rates compared to credit cards. You should also try to pay for your books with cash you've earned, or borrow from family instead of using a credit card. Explore every other option before using a card.