College students these days have plenty of experience with credit. The average student graduates with tens of thousands of dollars worth of student loan debt, and many students even have credit card debt upon graduation. The problem, though, is that many students have absolutely no credit education. They can have degrees in anything but still know absolutely nothing about their credit and the problems it could cause for them later in life.
It’s important, then, for parents and other adults to educate college students about credit. There are lots of different ways to go about this. One of the most effective, though, is to simply run the numbers. Like most people, college students are inherently logical, and they’ll respond better when something is right in front of their faces. Most students are pretty poor, and they know the value of the dollar. This means that they will respond well if you give them an illustration of exactly what can happen if they go on taking out credit.
One way to do this is to use an online credit calculator. It can show you just how much interest you’ll pay on even a small debt over time. You can also use these to show how long it will take to pay off a debt at a certain rate or how much money you’ll pay in interest by paying minimum payments. Many students assume that it’s okay to make minimum payments, for instance, on student loans. They just don’t realize how much more money this will cost them over the life of a loan.
Another way to work with credit education with students is to let them know how much a bad credit score can cost them. Many students aren’t even aware that they have credit scores, even if they’ve had credit cards for years. Talk to your college student about how a poor credit score can affect them before they start to create a terrible score that’s too hard to dig out of.
Most college students graduate with big dreams. They want to get good jobs and buy beautiful homes and cars. What they don’t realize is that a bad credit score can keep them from getting the job of their dreams, as many employers look at credit scores to get an overall idea of how responsible someone is. Also, a bad credit score can keep someone from getting a home or car loan, so the decisions college students make now can affect their entire lives.