Students: Stay Out of Credit Card Debt

For some adults, providing students with credit cards is risky because young people are prone to overspending. Nonetheless, when managed correctly, student credit cards can be great tools for building good credit history. In this article, let us discuss valuable advice on how students with credit cards can build credit history and stay out of bad debt at the same time.

Choose the right student credit card for you. Just like personal credit cards, the terms and conditions of student credit cards vary from one issuer to another. Some may offer reward programs while others may not. It is very important to find a credit card that is most suitable for your needs and lifestyle. Never sign up in a hurry. You need to carefully evaluate the features of the credit card that you can personally use as a college student.

Set your personal limit. To build credit history, use your student credit card regularly for purchases or bill payments. However, set your own limit as to the maximum worth of purchase or bill you can charge to your credit card. Set a limit that is lower than your actual credit line. Experts recommend keeping your credit card charges below 50% of your borrowing limit.

Use your student credit card strictly for school expenses. Be wise in using your student credit card. Never bring your credit card if you plan to spend the night out partying with friends. Remember to use it only for purchases which are important for your studies.

Avoid unplanned expenses. If you want to use your credit card to buy groceries or to the bookstore, create a list beforehand and consider your purchases carefully. As a general rule, avoid using your credit card for any unplanned purchase.

For instance, if you see an item that you did not plan to buy on sale, fight the urge to use your credit card. If you want to buy it, use cash but if you don’t have enough cash to do so, then it would be wiser for you to put off the purchase.

Always pay on time. All credit cardholders, both adults and students, need to be constantly alert about their payment due dates. Instead of waiting for your deadline of payment to arrive, it would be best to post your payments early. Keep in mind that if you fall behind your credit card payments, you will incur interest rate and late penalty charges. Simply by submitting payments promptly, you can money and eliminate the risk of bad credit as well.

Check your credit card bill. Make it a habit to review your monthly credit card statement to ensure that you are not paying for charges that are not yours. As a cardholder, the Fair Credit Reporting Act gives you the right to dispute unauthorized charges. If you find errors in your bill, call up your credit card issuer immediately and ask for corrections. Follow up your call with a formal dispute letter and send it via registered post mail.

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 2011

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