Common sense says not to buy something you can’t afford to pay cash for. And as a college student, it is often difficult to earn money. But that doesn’t mean you cannot use the credit card anyway. Here are a few pieces of advice:
1. If you use your credit card, only use it if you know you could pay it off tomorrow. That’s a good rule, because I suggest that you pay the entire balance off each month. If you pay it off within the 30-day cycle, you will not have to pay interest. There are plenty of people out there paying interest on credit cards, keeping all these companies in business. But you don’t have to be one of those people.
2. Only use it once in a while. I think once or twice per month is more than sufficient, while spending $100 or less each month. But remember the key: Pay it off every billing cycle.
3. Get a credit card with no annual fee. Credit cards make their money in all sorts of ways, and an annual fee is the dumbest way they can charge you. Again, don’t let yourself be taken advantage of by the credit card companies. There are a lot of credit cards with no annual fee.
4. Find a card with good rewards. Whether it’s airline miles, cash back, or college savings, there are all kinds of credit cards with different rewards. If you find one with no annual fee, you don’t have to pay a dime of interest. Remember, pay within the cycle you used the card.
5. Don’t have more than two or three credit cards. Any more will hurt you. Your credit score will suffer because creditors don’t like to see so many credit cards being used. Keeping two or three will still enable you to help increase your credit score.
6. Use credit cards to your advantage. If you’re smart with the advice given above, your credit score will increase. The higher your credit score, the more money you will save. When you need a loan, such as a mortgage or car loan, you will get the best rate possible, therefore saving a lot of money over the course of the mortgage (usually 30 years worth of saving!).
There is a lot of advice on credit card use. But the biggest thing to remember is to be responsible!