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The Suburbanite
  • Help your college freshman avoid the credit card debt trap

  • As students head off to college, especially those starting out as freshmen, here are 5 tips that might help curb the damage that can be done to the wallet.

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  • It’s well documented that college is expensive.
    Tuition and books are just the beginning. Living expenses — in a dormitory or an apartment — will add a lot. And then there is the occasional pizza night out.
    As students head off to college, especially those starting out as freshmen, here are 5 tips that might help curb the damage that can be done to the wallet.
    1. SET UP A BUDGET
    This tends to be one of the two most popular recommendations.
    Essentially it’s a matter of knowing how much you have to spend and keeping track of it. Going crazy over details isn’t necessary. Setting aside some money for fun is okay. It’s all a matter of making certain you don’t spend more than you have.
    2. AVOID CREDIT CARDS
    Patrick Harris, director of public affairs for the Ohio Credit Union League, is one of many who advise students to avoid folks offering free gifts to sign up for a credit card. “You may find yourself using the card and racking up expensive, credit-damaging debt,” he said.
    Legislation has been passed restricting some of the free giveaways, especially for students under the age of 21 who now need a co-signer or proof of income, according to LowCards.com, a website with credit card information for consumers.
    Concerns about credit cards have the University of North Carolina at Greensboro advising incoming freshmen: “Do not even apply for any credit cards.”
    3. CONNECT WITH FINANCIAL INSTITUTION
    If students are heading out of the area to attend college, they will likely be drawn to a bank with name recognition from home.
    That likely means opening accounts with one of the larger national or regional banks. But working with a local bank might help in an emergency. It’s likely easier for parents to make a deposit if needed.
    Another option is working with a credit union, said Diana Hendershott, who handles member development for the Canton Police & Firemen’s Credit Union.
    While credit unions are usually restricted to specific areas, they do have shared branching services, Hendershott said. Shared branching allows a student outside the area to access local credit union accounts. Or the student can open an account at a credit union in the college community and still have access to the account while home.
    4. DEBIT OR PREPAID
    Parents and students might consider debit cards, prepaid cards and secured cards, LowCards.com suggests.
    Debit cards are tied to checking accounts. Online account alerts can let account holders know when the balance gets low.
    Banks and credit card companies issue prepaid cards, which sometimes come with a variety of fees. Some prepaid cards allow for direct deposits, ATM withdrawals and bill pay, similar to a checking account.
    Page 2 of 2 - A prepaid deposit is needed to obtain a secured card, and some have fees and high interest rates.
    5. IDENTITY THEFT
    Paul Snyder, vice president of marketing for the CSE Federal Credit Union, warns students to watch for identity theft.
    Be wary of phone calls, texts messages or emails asking questions about accounts, Snyder advised. Financial institutions don’t send out those notices seeking account information.
    “Phishing incidents on accounts seem to be an annual event,” Snyder said.
    Some receiving messages asking about accounts should directly contact their financial institution instead or check its website. Don’t call a number that’s left or answer an email, he said.