It’s the holidays once again and students are not exempted from spending. Students who have their own credit cards need to be more cautious about their spending habits. Charging too many holiday expenses to your student credit card will not just be bad for your pockets, it will be bad for your credit score.
On this post, we present the college student’s guide spending to frugal spending and smart credit card use this holiday season:
Create gifts. Instead of just buying something from a shop, why not make the gifts yourself and show your artistic side. A handmade gift you made yourself will be more special because you spent time and effort making it. You can also customize the item to make it really suited for the person you plan to give it to.
Put together your own gift basket. Store-bought gift baskets can be very expensive. If you plan to visit friends and relatives this holiday, you can buy baskets from a craft store, fill it with goodies from the grocery, embellish it with your own decorations and voila – you have a gift basket.
Make your gift list. Who are the people you want to give gifts to this year? Set a definite budget for each person and find something that matches his/her personality. Do some research? What sort of things does this person enjoy? Does he/she have a hobby? A gift does not need to be expensive in order to be special.
Set a spending limit. How much do you plan to spend on gifts this year? How much do you plan to spend on food and parties? If you plan to go on a trip, make sure that you have sufficient savings allotted for travel. It’s important to set a specific budget for all the holiday expenses and activities you plan to participate with. This way, you will not be caught in a mire of debt when the holidays are over.
Don’t charge it all to your student credit card. If you have a student credit card, do you plan to use it for the holidays? If you do, how much of your expenses can you afford to charge to credit? Be realistic on setting a limit. See to it that you will be able to pay your full balance by your due date. If you have any doubts, it is recommended that you use cash instead.
Be ready for repayment. How will you be able to pay your credit card debt? Do you have a part-time job? If you’re going to spend all your savings this holidays, be careful that you won’t have anything left to pay your debts.
Watch out your limit. Most student credit cards have lower credit lines than regular cards. As a student credit cardholder, you should be aware of how you use your credit limit. Keep in mind that maxing out your limit can pull down your credit score and it can months for you to recover points you lost. Ideally, you should not spend more than 30% of your available limit and this is something you should seriously consider.
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