If you’re preparing to finish college soon, one world that you should aim to conquer is the financial industry since everyone has to learn to be financially independent. It’s part of being an adult. One way you can prepare yourself for financial independence is to learn how to use credit cards the right way.
Here are 5 tips you can use so that you won’t be caught flat-footed in this regard.
1. Use Credits Cards Even You’re In College
There was a time when student credit cards were all the rage in the dot.com era. However, there was some fall-out from that. It’s not that many financial institutions were eager to return to the practice of offering credit cards to college students, but many were unable to repay debt.
Nowadays, it’s accepted that students can be offered student credit cards so that they can slowly learn how to be responsible in their usage.
If you learn how to use credit cards even before you reach your senior year in college, chances are, you’ll be a responsible adult who can be trusted with even more credit after graduation.
2. Monitor What You Spend On
One reason so many college students found themselves mired in credit card debt is their wanton use of it; without checking their balance. To avoid that, student credit cards now have lower credit limits. Meaning, you can still have credit but not as much as a responsible adult with a job.
To make the most of that lower credit limit, you should regularly list down what you swipe on. Keep your card receipts and then check your balance every week. It pays to have a file in your computer just for this or you can go low-tech and just jot it down in a spare notebook.
The point is, you have to be aware of how much you’ve swiped so that you don’t get surprised if your credit card has reached its limit; use it responsibly.
3. Be Aware of Annual Fees For Working Professionals
It may be misleading to have a credit card while in college because many credit card providers don’t charge annual fees for student credit cards. So, educate yourself by asking around for the annual fees charged to a credit card user who has a full-time job.
This will make you soberly realize that providers of student credit cards are actually generous by waiving annual fees. It’ll also make you want to do very well in college so that you can get a great-paying job after graduation and be able to pay for a card with higher credit limits.
4. Regularly Pay For Your Balance
Nowadays, some college students have at least one part-time job to help pay for their daily needs. Students like these may be responsible enough to pay their balance regularly.
However, if you have trouble paying for your balance regularly, even with a job, then that’s a concern that should be addressed. It’s important that you get used to paying for the credit card balance so that the principal doesn’t accumulate. Credit card debt can spiral out of control very easily, especially if the compound interest accumulates.
If you can’t handle your balance, it may be best to give up the credit card usage until you learn to pay your debts on time.
5. Don’t Be Afraid To Ask For Help
It’s okay to admit when you don’t understand how your credit card works to build your credit history. And, it’s best to ask someone you trust to explain it to you until you get it.
If you can ask your parents or whoever is the responsible adult in your family, ask them to help you compute for the interest rate of the student credit cards being offered to you. Ask them also to help you make sense of the terms and conditions that govern the use of your student credit card.
If there’s anything you don’t get, bring it up at once before you apply for any card. Doing so is also part of being financially independent.
Conclusion
College students nowadays have many things to be grateful for. Having access to student credit cards is one of them.
If you’re thinking of getting a student credit card, be sure you can handle it. Monitor what you buy with your card by keeping your receipts and keeping a log of expenses. Compare the annual fees of your student credit card with the annual fees for regular credit cards. Be responsible for paying your balance on time to avoid penalties. Lastly, ask someone to explain how a credit card works to build a good credit history.
All of these will help prepare you for bigger financial responsibilities after you graduate from college.
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