Many students have their own credit cards which they use primarily for building credit. Before using your student credit card to buy from a shop or an online store, what things should you remember? Listed below is a checklist for students on how to buy with a credit card safely:
1. Check your issuer and the merchant’s policy. You should understand the merchant’s policy on refund and returns before purchasing, especially when shopping online. As a student credit cardholder, you should also be aware about the purchase protection services provided by your issuer. While most shops offer a 30-day refund, you might be able to return a product even after the merchant’s return guarantee has expired if you used a credit card to make the purchase.
2. Purchase only from reputable merchants. When shopping online, it can be tempting the buy from an unknown merchant because of the cheaper offer. Sure, you want to save money but be careful that you don’t get ripped-off in return. It’s best to buy only from reputable merchants with a strong track record of history. However, you may also consider buying from a new shop if there are convincing proofs that the merchant can be trusted.
3. Shop around for the best deal. Purchasing with a credit card is quick and convenient. However, you want to take the extra time comparing deals and closely evaluating offers. You can read consumer reviews and use online price comparison tools to make your search easier.
4. Examine your credit card statement. Check your issuer’s terms on unauthorized purchases and liabilities before using your student credit card to shop. Be sure to check your billing statement when it arrives to make sure that there are no incorrect or unauthorized charges. As a credit cardholder, you have the right to dispute errors and unauthorized charges in your account.
5. Keep spending and credit usage minimal. There are two good reasons why you should keep your credit card spending in check. First, you want to make sure that you will be able to pay off your full balance on time to avoid bad debt. Second, you want to make sure that you will not be maxing out your credit limit.
Not paying on time and maxing out your credit limit are the two worst things you can do with your student credit card. These behaviors can inflict real damage to your personal credit score. Keep in mind that payment history makes up 35% of your FICO score while credit utilization follows close at 30%.
Check your available balance before shopping. Plan your purchases ahead of time and create a list. Calculate your expenses so you’ll have an idea how much you’ll need to charge to your student credit card. If an item is not on your list, fight the temptation to buy it, even if the item is on sale.
6. Pay off your full balance. Students must realize the importance of paying their credit card balance in full at all times. You don’t need to carry a balance to boost your credit score. You will be saving yourself from a lot of trouble by making a full payment since you don’t need to pay interest and there’s no need to worry about unpaid charges.