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SMART MONEY, A COLUMN BY BRUCE WILLIAMS

Student loans might be best bet for unprepared parent of college-bound student

Tuesday, March 5, 2013 - 12:01 am

Q: My daughter will be going to college next year. What is the best approach to paying for college when one hasn’t prepared financially? I have outstanding credit, and I do have the ability to make monthly payments. – Reader, via email

A.: Student loan markets, like all credit markets, have been upset by the credit crunch and today’s economy. If you have excellent credit, you may be able to borrow against an asset such as a home. And loans such as the PLUS (Parent Loan for Undergraduate Students) are still available.

You should meet immediately with the financial aid office of the school your daughter will be attending. You also should have a chat with your local banker. Financing college is more difficult today, but it’s not impossible.

Q.: Someone told me that it’s OK to transfer credit card balances to a new card to take advantage of a low promotional rate, then move the balance later, when the rate is about to increase, to another credit card with the same offer. Isn’t it a bad thing to have that much open credit? – Reader, via email

A.: If you carry a balance and your credit is good enough that banks are offering you low introductory interest rates, there’s nothing wrong with transferring every six months or so, as long as you cancel out that first credit card. I have no quarrel with that.

However, if you can’t pay off your credit card bill every month – and the majority of Americans do carry balances at high interest rates – you can’t afford to be charging those items.