How Teens Should Manage a Student Credit Card

While parents can give all the advice they can give to help their teenagers stay away from bad debt, they cannot be there all the time to watch they’re every spending. Once classes start, many students will be left on their own with their first credit card.

Are you a student who owns a credit card? If yes, then consider it as a blessing that you can use for your studies. However, along with the convenience it provides are the responsibilities on your shoulders. If you’re going to use your student credit card as a responsible adult would, you can be sure that it will bring you great advantages later on. With correct management, you will be building an excellent credit foundation for yourself.

Consider the following credit card management tips that are not just meant for students but for adult credit cardholders as well:

Understand the terms of use. Before even signing up that credit card application, see to it that you are aware of the rates, fees and conditions associated with using your card. As first time cardholders, teenagers may not be familiar with finance terminologies. Parents must review the Agreement with their kids and explain to them the implications of the terms.

Review your monthly bills. Examine your monthly credit card statements to be sure that all the charges in your account are accurate. If you notice unfamiliar charges, call up your issuer to clarify the matter. It is not uncommon for cardholders to be charged with bills they never incur. Students must understand that all consumers have the right to dispute erroneous billing as stated in the Fair Debt Collection Practices Act.

Skip the interest rate. Credit cardholders can save a great deal by not paying the interest rate. How? If you pay off your monthly balance completely, then you should not have to pay the APR. If your card offers 0% APR, make sure that you are aware as to when the introductory rate will expire.

Keep your charges minimal. It does not really matter whether you card has low rate or a high rate. The surest way to avoid bad credit is to keep your charges minimal. This way, you can easily pay off your full balance each month and avoid additional finance charges such as interest rate, late fees, over-the-limit fees, etc.

Choose a credit card that suits you. Consider your personal needs and lifestyle. Don’t compare yourself with other people, as each of us has his/her own financial capabilities. Don’t be tempted to get a reward credit card just because your friends or classmates have one. If you cannot commit to paying your monthly balance in full at all times, then a non-reward card with a low interest rate is the most practical choice.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit card articles that would help build student credit.

Copyright 2010

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