When you are off in college, it may be the first time you are financially independent. This independence often brings a credit card along with the ride. If you are not making a steady income or not able to keep up with the many expenses that come along with college, this credit card can become a fatality in your financial independence plan. If you feel you are ready to take on the responsibility of a credit card, make sure you follow this advice before signing on the dotted line.
With a prepaid card or debit card, you can get some of the same perks and benefits of a credit card, without the worry about payments and interest. Research theses before making your final decision.
Many credit cards, especially credit cards aimed at college students, offer an extended interest free period. Do your research and get a card that offers the best terms and longest interest free period.
Even if you don’t have the funds to pay off the full balance each month, try your hardest to pay more than the minimum each month. A good rule of thumb is to double the minimum payment each month.
If you are spending with a credit card, you should be able to fund the purchases you are making by the time the bill comes. In order to meet this responsibility, try to get a part time job so you know you will have money available when the payment is due.
With everything online, it is even easier to view your recent transactions and billing statements to make sure everything is accurate. At the same time, it is also easier to forget to check your billing statements. Don’t blindly pay your bill without knowing when and what charges were made and making sure the charge is for the actual amount of the purchase.
Chances are you won’t earn any substantial rewards anyway, and trying to earn the points will only encourage you to spend more than you had originally intended. Don’t purchase extra items to get more points, it won’t pay off in the end.
Once your grace period expires, the interest rate will skyrocket. Try and pay off as much of the balance as you can before you get hit with the high interest.
There is no need for you to have more than one card when you are in college. You will just get yourself into trouble! Stay away from store credit cards as well as they are usually coupled with an exorbitant interest rate.
If you are paying your bills on time, chances are the credit card company will offer you a higher limit. Don’t be afraid to pass on this. Having more available credit may be a trigger to make you spend more than you can afford. There’s no shame in politely declining the increase. You can always ask for an increase once you have a steady job.
Pulling a credit report once a year will ensure that all of your transactions are being reported correctly and that there are no fraudulent activities on your account. Once you begin using credit, you need to keep an eye on your credit report and score.
Remember, having a credit card is a huge responsibility and any mistakes you may make now can impact your ability to take out a new line or credit or a loan in the future. Before you know it you will be looking to take out a loan on a car or a mortgage on a house, so make sure you keep up with your payments and use the card sparingly so you don’t ruin your chances of getting a good rate on a loan in the near future.
More expert advice about Credit and Debt Management
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