Do students really need credit cards? Well, strictly speaking no. Again, using credit cards from early days helps them build credit score, provided it is used responsibly by them. It helps you in a variety of things like getting a car loan or to even reduce premiums over your insurance.
Guidelines for Student Credit Cards
Discussed below are few points that will help you understand issues involved in choosing a credit card and also about its usage.
- Choose the Best Card – Choosing a card that bears your University name need not necessarily be the best card. It is common for card companies to attract with introductory low rates, please do not be deceived. Rates soar up very soon. If the card has high annual fees, it means huge burden later. Never go for it.
- Know the Card Details – Before choosing a card know what it has to offer. Adequate research is a must to get the best card. Websites like cardratings and msn’s moneycentral help you choose the right card with their expertise discussions on various cards featuring their pros and cons.
- Goodies Don’t Really Help – Cards often come with a lot of goodies. Wait! They really do not mean any benefit to you. Things like reward programs, freebies are offered just to get you trapped. Be careful these cards normally come with high interest rates, which you tend to overlook with the gifts and benefits claimed to be offered. More often, the perks offered may not be valid for the spending levels of your card.
- One at a Time Please – If you wish to juggle too many cards. Word of caution! Please do not! Your credit score will be in great danger. Opening and closing cards just to enjoy the benefits or offers leave a black mark on your card statement. Use one card at a time. Remember it is a Student Credit Card and even if you intend to open atleast give it a year’s gap.
- Read your Bill – Going through your bill really helps. To know your limit, making note of the card closing date every month, helps you monitor your expenses, not to overshoot them in a single month. Also you get to know the interest rates charged on over due payments.
- Do not Spend More – Consider using your Student Credit Card at its minimum. Use credit cards are only a learning experience at this point in time. Learning to manage your personal finances begins from here. Ideally speaking you should not spend more than 1/3rd of your eligible spending limit. Try to use the card responsibly and learn to make the best use of it.
- Say no to Cash Advances – Does your card offer cash advances? Remember it is no income for you to draw as and when you want, it is an expensive liability to be repaid. If you need money it is better to do job hunt than going for cash advances.
Hope the guidelines stated above help you understand the meaning and usage of credit cards. Please be responsible with them and learn to handle them.
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