Many young people own a credit card or two while in college. If you are a student who owns a college credit card, consider the following tips on how you can stay out of debt this back-to-school season.
Plan your purchases. Before you go out to buy supplies and new things for the school opening, create your shopping list ahead of time. Thus, you can avoid buying items out of impulse or purchasing supplies that are not really necessary.
Use your credit card carefully. Shopping with a credit card can be risky if you do not take complete control. See to it that you will only charge important expenses to your card. More importantly, you want to make sure that you will be able to pay your full balance on time to avoid incurring interest rate charges.
Check your balance. Don’t forget to access your student credit card account to make sure that you will not max out or exceed your available balance. Keep in mind that maxing out your credit not only increases the risk of bad debt, but will also hurt your personal credit score. If you go over the limit, you will be penalised with more fees.
Use cash too. Do not charge all your purchases to your student credit card. Make a list of purchases on which you will use cash too. This is a great way to keep your credit usage minimal and avoid overspending as well.
Buy what you need first. It can be tempting to buy new clothing and other things especially when you are shopping with your student credit card. However, you must first check your list and choose the most important things you need first.
Watch out for new card offers. Many consumers receive various offers from credit card companies via post mail and email. These credit card offers can be exciting and you might be tempted to sign up for one or two new cards, even when you already have one. Keep in mind that managing too many accounts can prove to be a big challenge especially for a student like you. Since you do not yet have permanent employment, it’s best to stick with just one card.
Be careful with that rewards card. If you own a student reward credit card, you might think that it’s okay to charge more purchases to your card in order to earn more points. However, reward credit cards usually carry much higher interest rates than non-rewards credit cards. Failing to pay back your full balance on time would mean incurring expensive APR charges. Why would you spend more from your purchases just to earn reward points? The only way you can get rewarded is if you can avoid paying the extra fees from your student reward card.
Check your bill. After using your student credit card for shopping, check your credit card statement to make sure that all charges in your account are correct. Should you discover unfamiliar charges in your bill, don’t hesitate to dispute those charges.