How you use your student credit card while in college may have lasting effects on your personal credit. On this post, we talk about 8 essential tips on how you can use your student credit card to your advantage:
- Avoid a revolving balance. Instead of paying your minimum due each month, make it a point to pay off your entire bill each month. Doing so can save you from a lot of trouble. First, you can avoid paying the interest rate. Second, you can protect your credit score. Last but not least, you can minimize the risk of debt build-up.
- Choose a low rate card. It is very important to choose a student credit card with a low rate. Many young people are enticed to sign up for credit cards with rewards despite the high rates of interest. Considering that you do not yet have a stable job to support your financial needs, it’s best to go with a low rate card.
- Skip prepaid debit cards. Although prepaid credit cards are quite popular, you have to remember that these cards carry several fees including a standard fee per transaction. If you’re after saving money, a credit card for student is a better option.
- Do not charge everything. Your student credit card is a good back-up when you don’t have cash to pay for something really important. However, if you’re going to charge all expenses to your account, it can result to debt build-up. Eventually, you may find it difficult to keep up with repayment.
- Make sure it’s worthy. Before charging anything to your card, ask yourself, “Do I really need this item or am I just buying it because my other friends have it?” “Can I afford to pay it on time?” “Can I pay for this in cash instead of charging it to my credit card?”Think things over carefully to avoid impulsive decisions.
- Read the fine print. If you are in the process of applying for a student credit card, spend time reading the fine print. On the other hand, if you already signed up for the card, review the Terms and Conditions to make sure that you are aware of your privileges as a cardholder as well as your limitations.
- Sign up for automatic payment. One effective strategy to avoid missing your due dates is to sign up for automatic payment. This way, you can avoid late fees and you protect your personal credit score.
- Don’t sign up for too many offers. Credit card issuers usually send offers to potential student cardholders in various ways. You may receive these offers from post mail and even from emails sent by credit card companies. Fight the urge to sign up especially when you already have a student credit card. Don’t submit an application just to get the free cap or free shirt. Once you get approved, it will be more difficult to cancel the account. Even worse, managing too many credit card accounts can be risky.