This is Penn State | Personal finance

mmorgan@centredaily.comAugust 23, 2013 

Student credit ILLUS

300 dpi 3 col x 15.25 in / 146x387 mm / 497x1318 pixels Jim Atherton B&W illustration of a student falling off toppling house of credit cards. Fort Worth Star-Telegram 2003

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    Penn State Behrend’s Center for Financial and Consumer Outreach provides a resource for Penn State students to learn more about credit. It offers interactive games and financial calculators and provides availability to experts who can answer additional questions. The website can be accessed at .

Every college student should have one credit card, Mary Beth Pinto, Penn State Behrend marketing professor, said.

Pinto said having a good credit rating can be helpful for students when they graduate to make bigger purchases such as a car.

“Unless you have established credit in some other way, you need to establish credit,” she said.

But she added credit comes with a large amount of responsibility, and students must be educated on all aspects that come along with the plastic card.

Pinto provided additional tips for managing money:

Getting credit

The 2009 federal Credit CARD Act made it harder for people younger than 21 to get access to a credit card on their own.

Pinto said ways for a student to establish a credit score would be for a parent to co-sign for a card, or for the card to have a strict limit.

The act also made it illegal for companies to lure in young people with giveaways such as pizza and T-shirts.

Do your homework

There is “fine print” associated with a line of credit and it is important to read all of it. Pinto advises students to be as educated on the plan as possible and to make sure you know everything about the line of credit.

She said knowing things like limits and fees can be advantageous when dealing with credit.

“Most people aren’t knowledgeable,” she said.

Pay off the entire balance

Next to being educated about the entire process, Pinto said paying off the complete balance each month may be the most important thing when dealing with credit.

She said students should only make purchases they can pay off at the end of the month, because making minimum payments and accruing interest is an easy way to rack up massive debt.

She advises students to either use the card solely for emergencies or for convenience if they have the money to pay it off.

Stick to one card

Pinto warned of risks that can come with department store credit cards offering discounts.

While this may seem like a good idea in the short term, each store credit card is a new line of credit and will cause the person to have a lower credit score overall.

Pinto said opening and closing multiple credit accounts also will result in a reduced rating, so students need to have one consolidated card and stick to it.

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