You have just finished high school and are now about to enter college with promising dreams. Indeed, college years can be one of the most exciting times of your life. This is time you will gain more independence – emotionally, mentally, and even financially. In fact, many young people acquire their first credit card while in college.
Is this going to be your first time to apply for a credit card? If yes, consider the following tips on how to find the right student credit card and how to use it to your advantage:
Apply for one student credit card. Since you do not a stable source of income, it’s a good idea to stick with just one card. This way, you can keep track of your spending more easily and you can focus on paying just one credit card.
Make sure payments are reported. See to it that your payments will be promptly reported to the three major credit reporting agencies (Equifax, Experian, TransUnion). You want to use your student credit card primarily for building early credit history. By using your credit card regularly and submitting your payments on time, you can build a solid credit score while in college.
Watch out for teaser rates. Many credit card companies advertise zero interest to entice new cardholders. Although a zero interest rate credit card sounds tempting, you should first make sure that the regular rate will still be reasonable. Keep in mind that introductory rates don’t last for long. You might be able to enjoy zero interest for six months or a little longer but what happens when the introductory period ends? Will you be stuck with a high rate student credit card? You’ll also want to check out the rest of the fees that you may incur such as annual fee, late penalty and over-the limit charge, balance transfer charges, etc.
Choose a student credit card with no annual fee. The yearly fee can prove to be a burden. Why pay the extra cost when you can find a student credit card that carries no annual fee at all? If the card has a good rate and reasonable terms, then you should choose it over one that requires yearly fee to keep your account active.
Read and understand the fine print. Don’t be too caught up with the thrill of having your first credit card. You might forget to read the Terms and Conditions or perhaps you may just scan through the agreement that you fail to see all the fees and the consequences you will be facing. No matter how great the offer is, always take it slow. Read each and every statement of the Agreement page before submitting your application.
Be a smart credit card spender. You should use your student credit card regularly to build up credit but that doesn’t mean you should use it on unimportant purchases nor should you charge purchases to your account whenever you feel like it. Be responsible. Always think about your repayment obligations and make sure that you will be able to pay off your charges on time.
|About the Author
Samantha Wilson is a consultant for credit cards for students. For years she has written student credit card articles that would help build student credit.