By Charlie Brown

Did you know that getting a credit card is an achievement in itself for young college students? It is one of the biggest steps to establish your financial independence. Then, you must know how to build a good credit history when a post-graduation opportunity knocks at your door. Yes, maintaining a healthy credit score is as essential as achieving a good GPA. You might be wondering why strong credit history is so essential. Well, managing your student credit card well will help you gain financial success. If you have a strong credit score, you have opportunities galore when it comes to meeting your expenses. For example, you can pay rent for living in a decent apartment, buy your home, and get a car loan. To avoid messing with your finances, here are five tips to manage your student credit card the smart way:

1. Pick out a Card Carefully

Remember that not all credit cards are the same. They have their pros and cons. Therefore, take some time out and research on the internet. There is no need to rush. If a credit card agent forces you to opt for a card without giving you time to think or research, avoid such people at all cost. These sales agents want to meet their monthly targets. They are least bothered about you. Compare different types of student credit cards and choose the one that suits your spending habits, needs, and lifestyle. Pick a card that helps you establish a good credit history. Select a financial product that does not include an annual fee or a late charge if you default payment for the first time. Avoid credit cards that have hidden fees. You can opt for cards that give you rewards such as paying for your textbooks at merchant websites. You can also pick products that let you use rewards to pay for your dorm room necessities.

2. Avoid Spending More than You Can Afford

Some students overspend. They keep eating out at restaurants, buy movie tickets, or pay for cabs, all on credit. All these are unnecessary expenses that you must avoid. Make sure that you use your credit card for paying your apartment rent, food, and education. You think that after you graduate, bag a well-paid job; you can easily pay off the credit card charges. Wrong! You are sadly mistaken. If you carry over your debts month after month, the outstanding balances will accrue and inflate over time, damaging your credit score. Avoid this trap. Spend only on necessities and items that you can afford to pay off comfortably. Else, your financial stress will start affecting your lifestyle.

We recommend that you monitor your monthly income and expenses. Cut your coat according to your cloth. Once you reach the credit card limit, stop using the same until you clear all dues to the bank or any other financial institution. Avoid letting peer pressure to make you overspend. A spring cross-country vacation is no fun if you cannot pay for your traveling expenses.

3. Make Timely Payments

Your goal is to use your credit card wisely and build a good credit history. Therefore, you need to make payments on time if you want to be in the good books of your bank. Delaying your monthly payments will affect your credit score. Your student credit card will help pay for college expenses only when you make all payments on time. Did you know that the lion’s share of your credit score, 35 percent comes with a good credit history? It means you need to make timely payments. If you need to pay your credit card company by the first week of every month, then clear the dues on time. If you forget to do so, then call the financial institution to be on track again. Do not let a missed payment hang back for weeks. If you do so, your debts will grow, and you will fail to maintain your student credit card.

4. Avoid Using Too Many Cards

You will notice many credit card organizations lure students with attractive offers. Yes, you are tempted to get a new card every time you visit a store while shopping. Do not fall into the trap of availing every credit card deals and discounts that come your way. If you have too many cards, you will overspend and fail to make the payments on time. You will not be able to monitor your spending and payment due dates. Avoid such traps if you get too many opportunities to overspend, thus increasing your debt burden.

We recommend that you use only one card. If you have the need, do not opt for more than two at any cost. Two cards are enough to meet your daily expenses. Once you graduate and get a well-paying job, you can opt for more. Wait for such time when you know you have enough monthly income to pay all credit card dues on time. Do not let financial stress get the better of you before that.

5. Check Your Credit Score Regularly

Do not forget to check your credit report on a periodic basis. You need to build a good credit history. Yes, no doubt about it, but then you should understand the details mentioned in the report. Monitor the entries regularly and check for errors. If you find any erroneous entries, report the same immediately. Else, you will end up damaging your credit score even after making timely payments. You are entitled to get a credit report free of cost from the leading credit bureaus such as Experian, TransUnion or Equifax. Visit websites like annualcreditreport.com for a free report.

Conclusion

The moral of the story is to learn how to use your credit card smartly without affecting your score adversely. Build a strong credit history. Follow the tips for a safe, positive, and secure financial future. Pay your bills on time. Get a student credit card and learn to use it responsibly. Avoid deals that sound too good to be true. When you have a healthy a credit score, you increase the possibilities of borrowing money in the future at better terms.

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