Happy New Year! As we welcome 2018 with lots of energy and a burning desire to achieve all our New Year’s resolutions, I’d like to share my first “adulting tips” article of the year – using credit cards wisely in college. For many, college is their first experience of adulthood. They leave home for the first time and start taking control of more aspects of their lives, including their finances. To keep things easy, especially with the rising addiction of online shopping, that also means applying for their first credit card.
If you’re a college student, and you have, or are thinking of getting a credit card anytime soon, here are some tips to help you use your plastic wisely!
Don’t just apply for the first credit card you come across, shop around for the best deals. Do your research, find out the best credit cards for average credit you can get, and see if you are eligible for any cash back or rewards-based cards for students. One thing many don’t know is that the more applications you make, the less likely you are to be approved by any bank. This is because your credit score is more likely to be poorer as many applications make it seem like you’re desperate. So yea, do your research and only apply when you’re sure!
Plan to Use Responsibly
It’s always a good idea to plan how you’re going to use your credit card, and more importantly, pay for it. Only spend what you can afford and pay it off at the end of the month. That way, you’ll have far fewer problems that can hurt your credit score before you really need it. If possible, you should only use it in emergencies!
Don’t Forget, Credit Cards Can Cost You a Lot
Unless you have a zero percent on spending card or you’re in the free period, your credit card spending will come with interest. Usually, the rate is pretty high, higher than the interest rate of a loan. You might also have to pay an extra fee for cash advances, late payment fees and even a fee just for holding the card. Bear all of this in mind before you start spending like a billionaire.
Leave Your Card at Home When You’re Drinking
Oh trust me on this, I’m not even proud of the amount of time I regret taking my cards out on a party night. Drinking is a huge part of college experience, but hello buddy, we’re all trying to be responsible adults here! You don’t want to get into debt because of the extra shots you want on a random Friday night. The best way to avoid the temptation is to leave your credit cards at home, just withdraw a sensible amount of cash for the evening, and you’ll be spending responsibly.
Avoid Fees Entirely
If you pay off your credit card’s balance in its entirety at the end of the month, or you clear your balance before interest is applied, you won’t pay any interest at all. So make it your mission to do exactly that!
Do the Credit Card Shuffle
If you can’t clear your balance before the payment free period, you can use balance transfer credit cards to skip paying interest. In the first instance, apply for a card that allows you to spend interest-free for a period of six months or so; when the six months is up, apply for a zero percent on balance transfers card; transfer your balance over and voila – no more interest! Of course, you’ll have to pay a small fee, but it will be much lesser than a year’s interest. 😉
There you go, some tips to help you college kids spend with your credit cards wisely. I have my share of regrets and “I wish I knew” moments when it comes to handling my own finance, so I hope that this article will be able to help some of you. Here’s to a year of successful adulting and wise spending! xx Wendy
Feature image by Pixabay
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