Very few people can claim that they made it through college without accruing any student debt. However, the key to ensuring that you graduate from school without having to pay back more than the actual student loans you used to go there is pretty simple: learn how to use credit cards responsibly.
Credit Card use is an important part of life.
Not only do they help in emergencies and by providing protection on your purchases whether online or in the store; but by using them wisely and paying your bills on time, you will also establish a good credit line ensuring better investments in the future (i.e. buying that two-bedroom condominium in the city or your dream car).
No matter what your goals for the future are, if you are financially responsible from the beginning, you will make your journey toward accomplishing those goals that much easier. Therefore, when you get your first credit card, try to refrain from spending needlessly and charging everything. The best thing to do would be to set a spending limit each month that you know you can pay off completely when your billing statement comes. We all know that emergencies happen, so if you do end up putting more on the card than you can afford to pay off immediately, at the very least, try to pay more than the minimum payment owed. And finally remember, credit card use is NOT mandatory. You do not have to spend money every month to keep the card and you will help increase your credit score just by having an open line of credit.
Choose Your Credit Card Company Carefully
When you first arrive on campus, you will probably run into a multitude of companies offering student credit. If you do not already have a credit card, this may be an ideal time to open an account. Just be sure to inquire about any annual fees, finance charges and the various interest rates being offered. Also, read all of the fine print and make sure you understand what you are signing up for. If something doesn’t make sense, ask about it.
College Years – A Great Time to Build Good Credit
Avoid needless student debt. Try to limit your credit card use to emergencies only or at the very least, avoid impulse buys and set spending limits for yourself. Make sure you pay your bills as soon as they come in so that you can avoid any late fees and keep finance charges at a minimum. Missed payments will stay on your credit report for seven years and will negatively affect your credit score so always, always, always pay your bill. If you stick to these spending habits, you will establish a good credit line and avoid needless financial burdens in the future.