A lot of young men and women in New Jersey who have just finished college will be venturing into the world of financial responsibility for the first time. These individuals are especially vulnerable to getting mired in credit card debt. However, rather than learning such debt lessons the hard way, parents can help prepare their children in advance with some important pieces of advice. If followed, it could be a way for the young to circumvent the need for personal bankruptcy protection later in life.
First, newly graduated university students can be encouraged not to take out lots of credit cards at the same time. Moving into credit card use slowly is preferred. Even though credit card offers might say they can give consumers various cost-saving advantages, those who are inexperienced with tracking credit card use and paying bills on time may find it difficult to juggle such details. Potentially, this could lead to debt problems later.
Taking the extra time necessary to go over credit card agreements with a fine-toothed comb will also help new credit card users avoid costly surprises. For example, many people do not realize that different kinds of credit card use may invoke different interest rate levels. For example, certain cards could charge consumers 25 percent interest on cash advances compared to normal purchases. Not knowing this ahead of time could be a very costly mistake for those who are living on a budget that is tight enough to warrant a cash advance.
Other advice, such as creating a budget, sticking to it and tracking one’s expenditures can also help newly graduated college kids stay on track financially. Indeed, any measure to prevent credit card debt will be valuable to those just starting out in life. In the event that credit card debt problems do fly out of control, however, various debt eradication solutions are available like debt consolidation and personal bankruptcy — which can assist New Jersey residents in getting back on solid financial ground again.
Source: investopedia.com, “6 Credit Card Rules for New College Grads“, Beverly Harzog, May 6, 2014