Beginning college is an exciting time in your life. You’re moving away from home; meeting new people; starting new classes and being exposed to life on your own. You’re 18 and you really know how to live. It’s a time to try new things and make a go of it on your own. How lucky and unconquerable you feel! Now if only you had a way to pay for all this new-found autonomy.

But wait! You do! Just open up your mail and answer your phone. Surely you’ve received numerous solicitations from credit card companies already. Perhaps you’ve even been offered something complimentary of reality needs to set in. You will quickly learn that nothing in life is free and you had better learn how to handle money early on, before getting yourself into debt. Hopefully you’ve heard stories about people having to file personal bankruptcy shortly after college, due to mismanagement of their money. It’s the truth. It can happen. You need to learn how to manage your money.

Credit card companies target college students because they are certain they will make money from this population. When you don’t pay off your credit card in full each month, you are paying an excessive sum in interest. Plus, if your payment is overdue, they ding you with a late fee as well. Learning how a credit card works is critical. You must read the fine print of any card you sign up for. Each one will have different wording in its agreement. Once you sign on the dotted line, you have committed to their terms. Now be sure you know what they mean!

A debit card can be a practical alternative; however this too has its complications. A debit card takes funds directly from the money that you have in your bank account - acting much like a check, just faster. With a debit card, you don't have to carry cash or checks, and it is very convenient to use in most places. If you don’t keep good records though, the money you spend one day may be scheduled to come out of your bank account the next day for an auto-payment. While it’s not as easy to run up a huge monthly debt, mismanagement of your debit card and bank account funds can lead to unnecessary monies being given away (to the bank).

Hopefully this has been good enough warning for you to learn about credit and debit cards and keep a tab on your income and expenses while in college. Don’t let college and unwise spending habits make you go into bankruptcy!