AVOIDING STUDENT CREDIT CARD DEBT

As a college student, your number one priority should be getting the education you are paying for so that you can be well prepared for a job upon graduation. During your college years, you will likely be utilizing a credit card for many of your day-to-day expenses as well as for education costs. It is important that you use your credit card wisely to avoid falling into debt.

As a result of the current struggling of the economy, the job market has become extremely tight and competitive. The credentials that may have had you a top prospect for the job of your dreams several years ago are not going to hack it nowadays.

It is very likely that any potential employer is going to be running your credit and analyzing your complete credit report profile to see how you handle all of your credit accounts including loans and credit cards. Therefore, encompassing significant student credit card debt can be a huge shortcoming in your search for a job. Below is some helpful info that will help you avoid student credit card debt.

Watch Your Spending
This tip may seem clear, but most college student knowingly use their credit cards for purchases that they don't need. For example, don't use your credit card for buying beer, clothes or video games. Of course you want to have the best experience while at college but if you are unable to pay for your lifestyle then you are looking for danger. Bottom line, never treat a credit card like it is your own personal credit line of free cash. Doing so will equate to you having tremendous debt issues.

It is important that you respect your credit cards and only utilize them when you must and also when it is financially sensible. For example, a good time for using your credit card would be if you can obtain a discount by purchasing your textbooks online.

Get the Right Credit Card
All credit cards are different. Preferably, you want to find a credit card that is secured and is exclusively for college students. It is important that no matter what credit card you choose, read the fine print of the offer before committing. It is very common for credit card companies to prey on college students by granting 0% introductory interest rates for a few months and then increasing those rates to ones that are sky-high. Offers with these types of teaser rates are not good for students that do not have the restricted capabilities of paying even the smallest of credit card balances.

When looking for a student credit card, consider the following:
- Introductory interest rates (if offered).
- Long-term interest rates that take effect at the conclusion of the intro offer.
- Determine what (if any) additional fees are associated with the card.
- Are there any perks offered? Points to be used for travel? Cash back?

Smart Account Management - PAY BILLS ON TIME!
The most important aspect of owning a student credit card is managing it...and that means paying your bill in full every month, before the due date! Doing so will mean that you are never going to have to worry about having to pay any sort of late fees and/or an increase in interest rates. Not paying bills on time or in full is the number one reason students end up with unmanageable credit card debt.

It is OK to pay the minimum once in a while. But prepared to pay the entire balance the next month. The minimum payment established by credit card issuers is created so that you not only have a balance for a significant period of time but you are paying significant amounts of money in interest. That's how they make their money!

Related Reading:
Good Debt vs. Bad Debt
Paying Off Credit Card Debt


 

 


 

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