College Students: Avoid These Credit Card Pitfalls
Published On June 13th, 2016

Credit card companies used to market aggressively to college students. Laws now prohibit this type of activity, but getting a credit card is important for college students. Sooner or later, you’ll want to purchase an automobile or home, and you’ll either have to use credit or save for a very long time.

However, using a credit card irresponsibly can create a huge financial challenge.

For best results, avoid these credit card mistakes:

1. Not getting a credit card at all. Now is the perfect time to establish credit and build a good credit score. You might think you’re being responsible by not getting a credit card, but you’ll face a significant challenge when you want to buy a house or automobile.
• Get a card or two and use them responsibly. That means the occasional, small purchase that you can afford. Buying gas or paying your cell phone bill are two examples.

2. Getting too many credit cards. Two cards are plenty for anyone. Imagine the damage you can do with five or more credit cards. Give yourself a chance to become familiar with the responsible use of credit.

3. Carrying a balance. Pay the entire balance each month. Once a small balance becomes comfortable, a moderate balance isn’t far behind. Use self-control and avoid ever carrying a balance to the following month.

4. Getting a credit card before you’re ready. Some teenagers are more mature than others. If you don’t have a bank account, have never held a job, or don’t know how to save, it might be better to wait. Better yet, give the card to a responsible parent and let them hold onto it. • Another option is to get a card with a very low credit limit.

5. Failing to track purchases. It’s easy to jump from store to store and spend a lot of money quickly. Keep track of your receipts and keep a running total. Post it where you can see it. Everyone with a credit card has been surprised at least once by the size of the monthly bill. Avoid any unpleasant surprises.

6. Not paying the bill on time. Being late with your payments will kill your credit score. Know when the bill should arrive and keep your eyes open. College dorms are notorious for losing mail. • Remember that you can see your bill online and pay it there whether you get your bill or not.

7. Making purchases you can’t afford until you get that big job. Many college students have used credit cards irresponsibly by telling themselves they’ll pay it all off in a few years when they’re raking in the big bucks. It can be tough to find a job after graduation. You’ll also have the expenses of moving, buying furniture, possibly paying back student loans, and more.
• Make a small purchase each month and pay the bill in full. If you can’t pay the entire bill at the end of the month, you’re outspending your income.

It would be a shame to waste the great opportunity college students have to begin building their credit scores. But using a credit card irresponsibly can haunt your finances for years. Give credit the respect it deserves. It’s a powerful tool that can either help or hurt you. Use it wisely.

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