Credit Card Tips For Students
Having a credit card can seem indispensable nowadays. Avoiding all credit card use may be a little bit difficult, so knowing how to properly manage your finances will be important throughout your studies and beyond. If you do decide to make that move, or already have, there are some ways to keep your credit rating excellent. Make sure to follow some simple precautions in order to avoid finishing your education with excessive credit-card debt. If possible, try to keep purchases on your credit card to a bare minimum, using it only when necessary. Whatever your priorities, make sure to keep track of them, as well as your actual spending habits.
One Credit Card Is Enough
The first tip on the list is: reduce the risk of debt. Try not to go overboard. Start off small. A single credit card should be able to handle your needs for school. Plan for your large expenses in a way that one card is sufficient; this way there is no chance of accidentally incurring the debt of multiple cards. Keep track of your expenses and if you are tempted by another credit card, decide why that is. If the plan is truly better, switch cards. If you are strapped on cash, consider your options for expanding your income or minimizing your budget first. If you have been regularly exceeding your budget, you should seriously review your priorities and consider how realistic your breakdown of your spending actually is. You can adjust these figures by accounting for all of your income versus the actual amount you are spending. This can be easily checked by collecting receipts, credit card or other account statement printouts, or by keeping a log. If you do choose to purchase items on your credit card often, make sure you can pay them off and to do this monthly.
The second tip on the list is to research before you buy. If your bank or school is offering you a credit card, it is probably because they are having a promotion, not because they want what is best for you. Student plans are not always the best option. The only way to know what is to research your options ahead of time. What is most important is to choose a plan with the lowest interest rate possible. Some cards have annual fees but there are some student cards which have none. You should also examine credit card limits and choose the card with the highest one. This will ensure that your card will be useful to you when you most need it.
Stay Under Your Credit Limit
The third tip on this list is to only use your credit card for things you can afford. It may seem silly to pay off your credit card balance monthly, since you can pay less and be fine. ‘Paying the bare minimum’ actually ends up costing more overall and can lead to your spending getting out of control. Plan to pay off your debt each month and prepare for your costs by keeping a budget and a log of your actual spending patterns. Compare the two to adjust spending projections.Keeping a close eye on this will help you stay below your credit limit and to reduce interest fees. Generally, the less you use your credit card, the easier it will be to manage your expenses. Make sure to also be extra cautious with your credit card information as it can be used to commit fraud if it falls into the wrong hands. Limit the sharing of your credit card as well, using it only for what is truly necessary.
Pay Your Balance
The fourth tip on the list is to stay on top of payments. Choosing a cheap credit card plan and limiting yourself to one credit card are all good ways to improve your credit card management. Making a monthly payment of the full sum you owe will keep you in the clear and allow you to maintain a perfect credit score. If you are having trouble handling the responsibility of a credit card, you may want to consider closing it and cancelling it altogether. Although this may be bad for your credit score, it may be better than making a bad situation worse. No matter what your credit situation, there is always something you can do to make the situation better. Whatever you do, make sure to research all your options first and to keep track of your spending habits.