Money tips and pointers for the post-secondary masses
By Jenn Markham, Contributor
Students aren’t the most prudent of individuals when it comes to money, probably because we have so little of it. That doesn’t mean you shouldn’t be aware of what you can do with the money you have. Here is some simple advice for the standard student to help keep finances in check.
Some financial institutions offer free banking for students, or until you turn 19 or 25. To reap these benefits, often all you need is proof of enrolment. But, be warned: even if you’re going to school for multiple consecutive years, you may have to go in yearly to update it.
Students might have been surprised when paying tuition this fall that Douglas College no longer accepts credit cards. Alternatively, students can pay tuition with cash, cheque, or debit online or in person. Some financial institutions also accept online payments. If you’re not comfortable carrying large sums of cash around, a money order (for under $5,000) or a bank draft (for over $5,000) is a good option. The money is debited from your account right away, and you’re given a cheque-like slip to use in place, in some cases for a small fee.
For students who previously used credit cards to pay their tuition, and had the money saved up, finding an alternative route to pay will be easier than for the students who carried a balance on theirs or someone else’s credit card from tuition. It gets tricky when you start to think about how much extra you’re paying on a credit card with 19 to 20 per cent interest. That’s where a personal line of credit might work better. Like a credit card, you can borrow money and make payments, but interest rates are lower, sometimes between three and five per cent. The likelihood to get accepted for these is often based on your credit score.
A credit rating is basically someone else keeping track of how often you make payments, and the likelihood that you’ll default on payments in the future. The idea is that no one will lend you money if they don’t have reason to believe you will be able to pay it back. When you turn 19, you have no credit rating, and in the scheme of lending, that’s equivalent to having a bad credit rating. This becomes important later when you want to get a mortgage for a house, or other lending products. Getting a credit card with a low limit that you pay off every month will help build good credit, as well as paying other bills on time such as your cellphone and house utilities.