Moving out. This is the term often connotated when you turn 18 and go off to college. College equals independence. Mom and dad aren’t around so you could do things you’ve always wanted to. You don’t have to worry about them looking over your shoulder because chances are, you’ll be miles away from them. Your only concern is cash. Since your parents aren’t there on your beck-and-call, you have to earn your own moolah and fast.
Just as how one is entitled to be on his own in college, this is also the perfect time for one to start off his credit history. Credit cards are often offered to individuals who are heading off to an independent stage of their young lives.
Tips on handling a college credit card well:
1. Don’t be overwhelmed on the bonuses you get when choosing a credit card that is appropriate for you. Some issuers include discounts on novelty stores that are of interest to their targeted clients. The catch is their consumer is too excited to what he can get less to notice that he is actually paying more because there is a higher interest rate.
2. There are offers that are only good at the beginning. Later on, there is actually a credit limit and it is not as much as the other competing credit cards.
3. The minute you have a credit card in your wallet, you have to use it wisely. Regard your credit card limit as the amount of cash you have in your wallet. You can only spend this much. There’s no mom or dad telling you to stop spending. The conscience is all yours. Remember that if you do go overboard your credit card limit, you wouldn’t be able to use it for some time – not unless you pay the withstanding balance. Dilemma is what if you are in dire need of cash the time your card got temporarily cut off.
4. Statistics show a majority case of credit cards getting cut up are from college students. The repercussion of this matter is that because of their bad credit card history, they will have a hard time applying for loans such as home insurance, car insurance and the like when they are already working. It is as if their reputation on the credit department is already tainted and unlikely to be erasable.
5. If you are going to sign up for a credit-card, make sure that you have ways paying for it. Most student credit-card holders have part-time jobs. Some make the mistake of having a credit card but then run to mommy and daddy when they can’t pay for it. It’s because if you don’t have money coming in and you have money going out, then there is no balance. We suggest that you have a part-time job for the reason of your credit card history. Learn to budget your money and also the time when you pay your bill. It looks good on your statement if you pay your bill on time and in full.
6. Read and understand the contract before you sign. If you are not that knowledgeable on business matters, you could ask a trusted friend or family member to explain terms such as interest, credit limit, balance, interest fee, annual fee, grace period and due date to you.
7. Just like shopping for things you like, look around and browse through a number of credit card issuers before deciding on one that you will be getting. Signing up for a credit card is a commitment you make because not only does it involve money, it involves your credibility as a consumer.
8. Be aware of your credit score. On average, a college student has at least one credit card. Go online and check your statements whether it’s accurate or not. By using your credit card like an adult and not like a shopaholic, there’s a possibility that you get big rates in the long run. This is because financial institutions that loan money check on your credit history and the moment they see that you pay on time and in full, they will have no qualm lending money or insurance to you.
It’s always best to start early in life. Why not do so in college? Those who are successful in their 30s have good credit card history. It’s like their reputation of being responsible is reflected on their bank statements and look how far it has gotten them.
Aaron Ballantyne is the owner of a credit card website with links where you can apply for a credit card which best suits your needs.