Tips For Students And Credit Cards
Ahhh, the joy of college. Finally, you get to leave the nest. No rules to follow, come in at any time of the night, that’s right, it’s time to answer to you and only you! But wait, having these great privileges means great responsibility right? Of course it does. College also means for most students that they are now going to need to be financially independent. As an adult, it is no longer Mommy and Daddies job to pay the bills and make sure that you have food in your mouth. With that said, it is no secret that many students find themselves coming across hard times at one point or another. It is usually at this point that students decide it is time to get a credit card. Now, I will never say that getting a credit card is a bad idea however, as a student, it is important that you understand how to use credit cards and the risks associated with improper use of credit cards.
How Improper Use Of Credit Cards Can Affect You!
Before we delve too deep into how to properly use credit cards, I want to really get your attention. So, with that said, here is the scary part of credit cards. If you choose to use your credit card improperly, you can wind up facing a severe financial hardship. If you watch T.V. chances are you have seen a debt relief or debt help commercial. Is that really a position that you want to be in? Do you want to have to struggle to figure out which credit card you are going to pay this week and which one you are going to pay late? As a matter of fact, improper use of credit cards can even lead to bankruptcy! So, do I have your attention yet? Great!
Using Credit Cards Properly
Alright, now that I have your attention, there are a few tips that you really should follow when it comes to using credit cards. The first tip that I can give you is to let you know not to spend too much money on your credit card. When you first get approved for a credit card, you are given a credit limit. This credit limit is the maximum amount of money that the lender is willing to loan to you and feel comfortable that they will be paid back. This is not the number that you should owe at all times. As a matter of fact, it is in your best interest never to spend more than 50% of your credit limit. The reason for this is simple, financial stable consumers like a financial cushion as consumers facing financial hardships eat through this cushion. By spending more than 50% of your credit line, you may display early signs of financial hardship which could have a negative affect on your credit!
Another great tip that I can give you is to never make the minimum payment. When you receive your credit card statement in the mail, you will see a minimum payment that the lender will accept. This is not the maximum number that you can send. As a matter of fact, minimum payments are usually calculated at 1% of the balance plus interest so, if you send the minimum payments, chances are that you will never actually pay back your debts in full. It is in your best interest to at least double the minimum payment. This will do a couple things for you. First, this will display financial stability to the lenders causing an increase in your credit score. Aside from the credit affects however, it will also help you to avoid a great deal of interest and finance charges associated with your debts. Paying more than your minimum payment is always a great idea however, for great credit results and accelerated payment of your debts, it is in your best interest to try and keep the extra payments consistent.
The final tip that I will give you here is to never pay your credit card bills on time! That’s right paying on time really is a horrible thing! You want to pay credit credit card bills at least 2 weeks in advance. This will give the mail system and lender time to process your payment ensuring that it will not be processed late and that you will not have to pay the penalty interest rate or deal with the negative affects on your credit score!
OK, now that I am comfortable with your ability to use credit cards properly, here is a list of the best student credit cards on the market!
List Of The Best Student Credit Cards