MANAGING A STUDENT CREDIT CARD
One of the best ways to begin to test your ability to
use a credit
card wisely is to get a card with a low credit limit -- around
$200 to $500. Refuse offers from the credit card companies to raise
your credit limit. Make the commitment to pay the card off every
month. Promise yourself that if you have saved enough money to cover
the outstanding balance, you will not have a huge debt because of the
low limit on your card.
Study your behavior using a credit card versus cash. Does your
decision making change when you use the card? Are you having
difficulty viewing the card charges as real money? Do you buy things
with credit cards that you would not buy if you were operating on a
Determine the monthly amount of money you can afford to charge
on your credit card. Then access your account online daily or weekly
to review how much you have charged. Monitoring the balance will help
you control spending when you view what you have already charged.
Consider giving yourself a weekly charging limit. Examine your
credit card balance online every morning. If you approach your weekly
limit, stop spending until the following week. You will gain a feeling
of control and the knowledge of your credit card balances will ease
your worries about overcharging.
Other Credit Card Management Techniques
Another way to curb the impulse to use credit cards is to put a
small sticker on the card -- maybe a red dot or a picture of your
favorite cartoon character. When you see that image on the card as you
use it, stop and ask yourself if you can afford to pay for that item
when the bill comes. If you know you won't have the money, remember
that your $20 pizza will end up costing $40 if you only make the
minimum monthly payment. Ask yourself if you still want to be paying
for that pizza in ten years.
Often, a credit card company will generously offer to increase
your credit line. You don't have to accept their offer. If you are
satisfied with your limit, write or call the company and tell them
you do not want your credit line increased. Later on, if you find
you need a higher limit, you can request an increase.
If you find your are not able to control yourself using a
credit card, switch to a check card or debit card. Cut up the credit
card, get the balances paid off, and cancel the card. The check or
debit card gives you the most ease of paying as a credit card. The
critical part is making sure you enter the purchases in your check
register so that you do not overdraw your checking account. When you
feel ready to try credit cards again, you will have no problem getting
If you get home after a shopping trip and realize that you have
spent beyond your means, return your purchases. Most stores cheerfully
credit your account if the price tags are intact and you have your
receipt. Or, have the store hold an item you are interested in
purchasing for twenty-four hours. This will give you time to coolly
reassess your ability to pay and whether you really want or need the
Have a ready response for new credit card offers. As you walk
by a table at the student union offering incentives to sign up or you
get a phone offer, just say, "No thanks. I only need one."
Always be aware of the cost of your credit cards. If you carry
debt, be sure to use the card with the lowest interest rate. But
always aim for being free of credit card debt.
Keep your future in mind, envision yourself graduating from
college and starting a new career, Imagine the freedom you will
experience starting your professional like without the oppression of
expensive debt. You will be able to live a better life.
It is easier to control your spending in college that it ever
will be later on. After all, students are not expected to have much
money and if you can manage your debt, you will have more prosperous
life after graduation.
Ask For Help
Another danger with using credit cards is that people may get into
so much debt that they feel the situation is hopeless -- they believe
they will never be able to pay off the balance. Some of you will build
up large debt using your credit card or you may already have debt that
you feel is oppressive. What should you do if you find yourself in
this situation? The first thing you should do is to seek help. Look
for resources on campus that will help you work through solutions.
Go to the student financial aid office, even if you have not had
contact with them before. Ask to see a counselor who can help you with
your credit card issues. Financial aid officers are concerned about
mounting credit card debt, and most offices have staff trained to help
with financial problems or who can direct to you a helpful source.
Almost every community has a Consumer Credit Counseling office
that provides advice, classes, and help for people to work out
reasonable plans to reduce their debt and to learn to manage their
resources. It is a free service and many people have worked their way
out of debt with the help of Consumer Credit Counseling.
a Credit Counselor in your area.
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