Pick credit cards based on rates, not gifts

Credit card debt is a problem many students may face when getting out of college. And until new laws take effect, card companies will continue to try and market to college students.

However, columnist Sandra Block recently wrote in USA Today that avoiding marketing gimmicks could help college students avoid being in a hole once they graduate from school. One thing they can do is avoid the allure of free gifts offered for signing up for a credit card.

Instead, students should pick credit cards that offer them the best rates and terms. Used wisely, credit cards can help a student build their credit score.

Students should also avoid picking a card based on the company’s reward programs.

“Who can resist free airline miles or cash back? Well, you should, if you don’t have much money and are trying to use your card responsibly,” Block said.

Some students may be tempted by lower rates. However, those rates are meant to entice students and could jump considerably if they miss a payment.

According to Sallie Mae, credit card debt among college students increased over the years. In 2008, the average credit card debt for a graduating college senior was $4,100 and is up by $1,200 when compared to 2004.