Nearly 65% of college students currently carry credit card debt, according to data from CollegeFinance.com.
In Greene County, one college senior has managed to avoid this common financial pitfall by utilizing a targeted credit-building strategy started before he left for school.
Credit card debt ranks as the second-largest financial regret for adults. To combat this trend, Matthew Hudgel, a senior in Fairborn, worked with his parents and a local bank to establish a healthy credit history before graduation.
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Hudgel admitted that he had limited knowledge of how credit worked during his high school years. His parents encouraged him to learn about the financial system early to avoid future struggles.
“Having that conversation with them, like learning why it is important to build credit. Having bad credit can be a bad thing,” Hudgel said.
Following his parents’ advice, Hudgel visited a local bank to open a secured credit card. This type of account requires a cash deposit that serves as the credit limit.
In Hudgel’s case, the limit was set at $300. He restricted his spending to approximately 30% of that limit, or $90 per month, and used the card exclusively for gasoline purchases.
Kristel Jensen is a regional retail executive at Fifth Third Bank. She said that many young adults find the credit system intimidating or difficult to navigate without proper guidance.
“It can be complicated, right?” Jensen said. “Just not understanding what steps to take or why it’s important to manage your credit score so closely.”
Jensen explained that secured cards are designed to help users develop the specific habits needed to maintain a high credit score. By borrowing small amounts and paying the balance in full each month, users demonstrate reliability to potential lenders.
“That behavior is taught through borrowing money off of your card and then paying it back every single month, demonstrating responsible credit card behavior,” Jensen said.
When Hudgel transitioned to college, he moved from his secured card to a traditional credit card while maintaining the same disciplined spending habits.
National statistics from CollegeFinance.com show that most college students use their credit cards for online shopping, dining out, and gasoline. By sticking to his plan, Hudgel saw his credit score rise into the 700s.
Hudgel is set to graduate this spring and begin a career in the U.S. Army. He said his high credit score has reduced his stress regarding future financial milestones.
“Having a good credit score makes me not as stressed of getting that all paid off, and after that, getting big ticket items like a car and soon a house,” Hudgel said.
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