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As students head back to college, there’s one lesson they may not learn in the classroom and that’s how to properly handle their finances.
Many students are the target of credit companies as they venture off on their own at college. Many financial institutions offer introductory rates and freebies to gain new customers, but the pitfalls are numerous for students who may not have a handle on how to maneuver through the credit system.
“You want to avoid taking that free t-shirt in order to get a free credit card,” said Daniel Deskin, Senior Vice President of Retail Banking with PNC. “A lot of times these can have a lot of fees associated with them or higher interest rates that really are disadvantageous.”
The marketing is enticing, especially for students who worry about paying for their education. YSU freshman Sydney Mari is planning to go to graduate school. She has been applying for loans through conventional means such as FAFSA. And YSU junior Jermane Vail is also looking at paying down his student loan debt.
“I have $10,000 in student loans and that worries me, but I have friends who have a lot more,” said Vail.
Financial experts say it’s easy for college students to add onto that debt if they’re not cautious. Deskin urges students to use online and mobile banking, track their finances and follow a budget. He also said to start saving now, even for small events like spring break.
“You take that habit and over your life, that’s how you establish a down payment for your car or a down payment for your house,” said Deskin. “Use mobile banking to set up alerts on their accounts so if their balances go below $50, they know they need money.”
Then when it’s time to pay student loans, make sure it’s paid on time to establish good credit.