As a student with your first credit card, it’s nice to have the freedom to spend money using a credit card. However, with that freedom also comes much responsibility. First, having a credit card helps to establish a good credit history for you, teaches responsibility in spending and paying back what you owe. But the most important thing to remember is that a credit card is there to help you maintain a positive credit history. The student credit tips below will help you to make the best decision when applying for and using a credit card.
1. Start a Credit History
The first step in establishing good credit is to open a savings and checking account. Then, you should apply for a student credit card. When using your credit card, only use it for regular or every-day purchases that you know you can pay off at the end of each billing cycle from your checking account. Over time your good credit history will grow.
2. Stick to One Credit Card
Too much of something, even a good thing, is not always good for you. If you are using your credit card for normal purchases and paying it off every time at the end of the month, then you should just stick to only that credit card. You may be enticed by other credit cards that offer you higher spending limits, but don’t fall for them. You certainly don’t want to get in over your head with numerous credit cards that you eventually won’t be able to afford. Normally, college students with more than one credit card tend to have credit problems in the future because they can’t control their spending and paying off the card balance.
3. Live On a Budget
Not living above your means is the best advice anyone can hear, especially a student. For every monthly expense you have, write it down so that you have a written record of what you’re spending every month. Use your monthly income to pay for regular items based on their priority. After you’ve calculated all of your monthly expenses, you will know exactly how much is coming in and going and you will feel more in control of your spending.
4. Financial Responsibility Counts
The responsible part of owning a credit card is to not lose control with your spending and to pay it off at the end of the month. Another important thing to remember is to pay you bill on time. Paying your bills late negatively affects your credit history, and it will damage your credit. A damaged credit history will take a long time to build back up again. So in order to avoid all of this, you should just pay your bill in full and on time every time.
5. Check Your Credit Reports Often
Identity theft is something that everyone should be aware of no matter who they are. A student is just as susceptible to identity theft as anyone is. In order to prevent identity theft, you must remain on top of every bill you have and every expense you’ve made. Most importantly, you must check your credit report from all three credit reporting agencies. These agencies are: Experian, Equifax, and Trans Union. You should check your reports from these agencies about every four months.
You certainly don’t want your credit to be in a negative standing. Learn these credit tips, and be responsible about what you’re spending and how you are spending it.
Before you head off to college, take some time to compare student credit cards. Here are some of the best student credit cards online. If you are done college, consider applying for cash back credit cards instead.