When it comes to college students, spending money is art . Students tend to have so much natural talent, that they rarely take time to perfect it with a most invaluable skill: budgeting.
Budgeting should be something students talk to their parents about before move out said Kathy Cannon, a student banking executive at Bank of America.
“Before deciding what is best for them, students should take the time to educate themselves about standard bank products,” she said.
Many students run into a bank and sign up for a checking account or a credit card without understanding what they are signing up for.
According to 2001 data collected by the Nellie Mae Foundation, roughly 80 percent of students have at least one credit card and hold an average debt of $2,748. In addition, 21 percent of college students have debts ranging from $3,000 to $7,000.
“It is important to know that with credit cards come responsibilities,” Cannon said. “Students should make sure they are spending within their budgets to ensure they do not accumulate too much debt.”
There are a number of ways to be a responsible card-carrying student. Try to keep only one credit card to avoid falling into debt with multiple companies. Also, use the card for emergencies only and always save the receipts to compare with the monthly statement.
Cannon adds that banks offer more services than credit cards for students.
“Many banks offer student checking accounts with special rates tailored to fit the needs of students,” she said. “And, if a student has a job, the employer can deposit a paycheck directly in the student’s checking account.”
Many banks also offer checking cards that can be used to withdraw money from an ATM or as a credit card in a number of stores. But with a checking account, a student must be careful not to overspend and accumulate large overdraft fines.
“Debit and checking cards are the best,” first-year Elena Bottomley said. “They help students keep from spending money that they don’t have because they can’t withdraw more than what is in their account.”
Using a bank is not the only way to go, though. Students who prefer cash never make last-minute stops at the ATM or have to pay banking fees.
