With the end of summer looming within a few weeks, students and their families may need to brush up on some financial dos and don’ts in preparation for that new college experience. Whether shopping for school supplies or applying for that first credit card, it pays to be smart about every transaction. The Better Business Bureau has some reminders designed to help avoid financial pitfalls for students transitioning to the college world.
Shop smart
Shopping for new clothes, accessories and electronics can be exciting. But don’t get so caught up in the moment that you overlook the basics and forget about the need to be an informed consumer. Remember these tips as you look over the merchandise you or your student will be piling into the shopping cart:
• Ask about return and refund policies. Remember that stores are not legally required to exchange an item or give you a refund. Be sure you save your receipts. For the sake of convenience it may be worthwhile to check on whether the store has a location near where you or your student will be attending college. Proximity can reduce the time and hassle of going through the return/refund process.
• Save the box and packaging if you think there’s even a small chance the item will have to be returned. Some retailers won’t accept returns on opened software, DVDs, CDs or video games. Hats and other intimate apparel my not be returnable due health regulations.
• See if they charge a restocking fee. Some businesses charge as much as 20 percent of the original price for returns of electronics and big-ticket items.
• Use care when shopping online. Get the physical location of the business and get a phone number for them. Find out their return policy and any warranty details. Be sure they are a reliable company and that their website is secure before submitting your credit card number to them.
Credit cards
Students about to enter their freshman year at college this fall know they are considered to be a valuable commodity by credit card companies. Chances are the applications have already started coming. This is an important time to remember that young people between the ages of 18 and 24 carry an average credit card debt of $2,002. It’s vital that anyone considering getting their first card takes the time to be selective about which card they choose. Be aware of your credit rating and learn to manage it before things get out of hand.
Read the offers carefully that come your way. Familiarize yourself with these three terms:
• APR: The annual percentage rate tells how much you’ll be charged in interest for carrying your balance over from month-to-month. Look for a card with the lowest possible rate.
• Fees: Hunt for a card that has a low annual fee or none at all. Look as well at the balance transfer fees, cash advance fees and late fees. They can add up quickly.
• Rewards: Many cards now come with cash back or rewards programs. Take the time to learn about how a card’s program works and take advantage of it in order to make the most of your spending.
Don’t apply for more than one or two cards. Most credit card applications cause what’s called a “hard inquiry” on your credit report and may slightly lower your credit score.
Always make your monthly payment on time. Ideally you want to pay off the full balance each month. Don’t put more on your credit card than you can pay off this way.
The excitement and expectations that come with entering college make this a wonderful time of life. Be sure that you manage your money well during this time and thereby assure that your memories of these years are full of happiness without financial regret. For questions or concerns contact your Better Business Bureau at 800-856-2417 or online at www.kansasplains.org.