Credit Card Tips for College Students

credit card managementWhen you finally get to college, you achieve something big. You gain the power to shift the future. You no longer depend on your parents and other guardians for major life decisions. You have the power to make decisions regarding your finances, and you qualify for credit cards.

It can all be too exciting. Many college students end up making major mistakes about their finances. A recent survey of people over the age of forty struggling with debt noted the following disturbing fact. 58 percent of them said they were struggling because they learned bad habits with their first credit card while in college. Read the following credit card tips for college students to save your future now.

Know the easy credit traps

There are many easy credit traps. For example, when you get some suggestions telling you that you got to have a card, just look the other way. Anything like a freebie should also trigger your alert and cause you to look the other way. Furthermore, do not fall for the promise of canceling your credit card anytime. These are traps to avoid. They get you into the credit card debt cycle, and you realize there is no way of getting out easily. It is better to stay out from the start.

Ask questions before applying for a credit card

Always ask whether you need a credit card. You can manage your money decently without a credit card. Many banks have ATM cards that will act as debit cards. They will allow you to shop online. You only get to spend what you have with the debit card.

Ask yourself whether you can afford a credit card. Think about the hefty annual fees for the privilege of a card. You will be paying a monthly balance, and you will also be buying things on loan.

Another question to ask is where the credit expenditures will go. There should be no need for a credit card when you are not going to get any special order for your items. If you are always going to have the opportunity to pay cash or with a debit card, then there might be no need for getting a credit card.

Find out the credit you need

As a college student, you should know your income and the money you are willing to pay as interest. Remember that credit card interests grow very fast compared to common interests. You can tell how much credit you can afford by looking at the total interest in a year that you end up paying for the amount you overspend on the credit card. The maximum you can afford should automatically become your credit limit. Any more than this will take you straight to financial ruin. It will come fast and easy, but getting out will be a nightmare. You should not place yourself in a position where you borrow money to pay other debts.

Be the smart student and take hold of your credit card habits. If you own a credit card, pay the balance and put it aside, or renegotiate your fees and monthly or annual payment. Let the freebies not deceive you.

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