Students are protected from unsolicited, predatory offers from credit card companies by law. Individual banks also have standards that student-creditors must meet before credit is extended. And, personal factors come into play.

Students should not apply for or accept credit cards until they know that they have the self-discipline to borrow less than their ability to repay the loan. Ideally, credit card balances would be paid off in-full monthly.

Resist accepting credit that comes with an initial application or credit acceptance fee. Look for credit cards with no annual fees. Compare the Annual Percentage Rates of different credit offers. Lower APRs are preferable. Look at the amount of late fees charged. Consider incentives, like cash back offers and travel awards, and evaluate whether those incentives are consistent with how household money is spent.

When gathering credit card offer information, borrowers can begin by checking whether their bank has credit card offers, and by consulting with parents, friends and consumer agencies.

 

Valrie Chambers, Ph.D., is Chair of the Accounting Department and associate professor of taxation and accounting. Betty Thorne, Ph.D., is a professor of statistics and the Christian R. Lindback Chair of Business Administration. They write Financial Fridays to bolster students’ financial wellness, including preventing financial mistakes, safeguarding their assets and identity, and thinking critically about financial decisions. For questions, contact Valrie Chambers at [email protected].