5 Tips for Your First Student Credit Card
Getting a student credit card is one of the biggest financial decisions you will face during your first few years as an adult. If you're like most people, your main reason for wanting a student credit card is simple: you want to buy things. While the ease and convenience having your own credit card is understandable, it's important to realize that even though your shiny new piece of plastic may look small, it can have a BIG effect on your future. Establishing a good credit history can help you to rent an apartment, buy a car, consolidate your student-loans, and get approval for cheaper credit cards with better rewards in the future. Having no credit history (or worse: bad credit history) can make all of these things difficult, and sometimes even impossible.
The good news is that making good choices with your first student credit card doesn't have to be difficult. By following these 5 simple tips, you can be well on your way to a bright financial future of high credit scores, low interest rates, and long-term financial stability.
1. Choose the Student Credit Card that best suits your needsThere are many different types of student credit cards out there, and you need to make sure that you choose the best one for you. One important factor to consider is the type of rewards the card offers. If your college is far from home, you may want a student credit card that offers frequent flyer miles. If your textbooks are too expensive, find a student credit card that offers points at your campus bookstore, or one with cash-back rewards.
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2. Use your card often, but not too oftenIf you just let your student credit card sit in your pocket, you won't establish much of a credit history all, so it's important that you get in the habit of using it regularly. That said, if you use your student credit card too often, you may lose track of your balance, and risk spending more than you can afford.
3. Give yourself a budget, and stick to itSetting a precise budget for how much you spend on your student credit card is the best way to ensure that you never go over your limit. Try to set this budget low enough to leave plenty of room for unforeseen expenses like car repairs, sickness, or last-minute travel.
4. Pay your full balance every monthCarrying a balance on a student credit card is never a good idea. Not only will you be paying interest that you probably can't afford, but you'll constantly have less room for emergency expenses, and you'll increase your risk of exceeding your limit.
5. Pay on TimeThe worst thing you can do with your student credit card is to miss a payment, or make a payment late. Just a few late payments can lower your credit score for years, so always make sure that you pay on time every month. If possible, set up an auto-pay account that automatically pays off your balance before it's due.
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