Student’s advice for credits
Having your own credit card as a student opens up many opportunities for you, but remember that having credit also means that you possess a credit history, one which can either help or hurt your financial future. Building a strong credit history and maintaining it while you are a student secures your future as an adult.
1. Be sure to pay your monthly balance in full and on time, or at least meet the minimum monthly payments.
It is best if you send the payment check a week before the due date in order to avoid penalties on late payments and finance charges. If you are making up for a student loan, ensure that it is fulfilled as well. Remember that your credit score is a measuring stick for your credit reputation, and any missed payments, unfulfilled obligations, and inconsistencies in your credit report can severely hurt your chances for loan approval later on.
If you’re stuck in a tight spot and you can’t fulfill a payment, at least be honest enough to get in touch with your creditor and state your case. You may be surprised at how accommodating your creditor may be to the idea of establishing an alternative payment method to suit your predicament.
2. Be responsible and take the initiative to set your own credit limit.
Keep your spending well within this limit in order to avoid overextending it, and incur penalties as a result. Allot a portion for establishing a savings fund, and reserve it for potential emergencies. Show that you have the ability to repay your debts by maintaining your account balances beneath a rate of fifty percent on your available credit.
3. Get to know the terms you’re dealing with before you shop for a student credit card, and limit the number you apply for and be approved of.
This minimizes your debt exposure, as well as simplifies your record keeping. Remember that too much credit inquiries for a relatively short time will make it appear that you are desperate for credit because of a financial dilemma.
Use your credit sparingly and wisely. Before swiping your card for any purchase, be sure that what you’re paying for is something you really need right now, and that you are confident that you will be able to fully repay the amount, including the extra charges that go with it.
4. Take account of all your billing records and keep track of all the entries in it.
It also helps if you can maintain a separate savings or checking account, and that your work record is desirable by being continuously and gainfully employed. Try your best to graduate without incurred debts, but in case you do, make sure that you can afford to pay for it in addition to your other expenses.
If you’re debt becomes substantial enough, consolidate it from debts with high interest rates to a single debt with a reasonable rate. The savings on the new interest rates should be used to make up for the debts outstanding balance, allowing you to pay it off more quickly.