Sensible Facts A Student Know Before Applying For A Credit Card
As a student, you will be under a barrage of credit card offers. Before you get signing happy and end up buried in debt, you should understand some things. While a credit card can be a major help and benefit as a student, you can avoid some major pitfalls.
Avoid withdrawing money from an ATM. If you are heading out some place and you need cash, and your bank account is low, avoid pulling cash of your credit card at all costs. You are much better off borrowing money for the night from a friend than you are withdrawing it from the ATM. Even if you have this option on your credit card, you are going to pay an exorbitant interest rate on that money. If you are going to take out a hundred dollars at the ATM, you may end up paying double that back after the interest is figured in.
Once you are the proud holder of a student credit card, you are going to receive a lot of unsolicited mail. You will get pieces of mail with checks attached saying you can use the checks, and it will take it out of your credit card account. Be careful with these, they are like cash advances, and you will be hit with a variety of fees, on top of still being held within your spending limits. The rate varies from card to card, but is never low enough to make it worth it. Opening up your own checking account is a much better idea, as many banks have free or very low cost options for students.
Do not pay your regular bills with your student credit card! When you have to pay your rent, your car insurance, or your cell phone bill, avoid using your credit card. Curing one bill by creating another is not a smart thing to do. If you do not budget properly, your credit card bill will be more than you can pay, and you will put yourself into debt. The key to being a successful debt free credit card holder is to pay off the card every month, and expenses like these severely hinder that ability.
On of the biggest mistakes that young people make with there credit card is making impulse purchases. Your credit card is not fake money, and you will owe it back. You do not want to have to dread opening your credit card bill every month simply because you cannot control your spending. Give yourself a spending limit on your card each month, and stick to it. Make sure you can pay it off each month as you go. Having a student credit card is a huge responsibility, but can be very rewarding if you treat it right. Following these few simple guidelines should help keep your credit rating high, your interest rate low, and your money flowing!