According to the study of US General Accounting Office 2001, the credit card for college students are very advantageous especially on medical emergencies, traveling and on cashless transactions. Another study showed that 77% of college credit cardholders use the card for personal expenses while 67% for occasional and emergency expenses.
With these results, is it alarming that college students are allowed to apply for credit cards even without employment yet? Well, we should not overlook the responsibility of these students to handle their finances. Even if they don’t earn the amount that they are spending, surely they care about the labors behind these.
And for the college students who wish to have or who are already using the credit cards, here are some tips to a smart way of handling your credit:
First, you should understand that every amount that you add into your balance should be paid on or before the due date to avoid penalties. So learn to take charge of your account so that you would not reach to the point when you are already thirty years old and yet still paying for your accounts when you were seventeen. Sounds exaggerated? Well, it could really happen. Don’t let this misfortune ruin your goals.
Study the terms and conditions governing the credit card that you are currently using or the one that you plan to apply. You should know that your purchases via the credit cards are not free! There are in fact additional charges that you pay other than the principal amount that you have spent for your shopping. Some of the fees are finance charges, annual percentage fees, cash advance fees and late payment fees. The finance charges are given to the unpaid account each month. The annual percentage fee is the yearly charge of the credit card provider for membership, so better look for a low rate APR when applying for a credit card. And the late payment fee is of course the charge when you don’t reach the due date of payment.
When you receive your allowance for credit card payments from your parents, make sure you settle your accounts promptly. Delaying of payment or not completing your monthly bill can cause your bill to hike. And if this happens, gradually you’ll find it hard to meet your chain of debts. Unfortunately, the problem doesn’t end up here because the credit report will reflect to your credit history. Surely, you don’t want a bad credit name when you apply for a job after graduation. Ideally, employers check on credit history before hiring and before promoting employers to a higher position. You certainly have to establish your credibility and better start it with your good credit name.
Manage your credits. When you shop, don’t shop like it would be the last shopping that you will do. Set your priorities and know what you basically need. And since credit cards for college students primarily aim to support and cushion you in times of emergency, don’t overuse the card for unnecessary luxuries.
And lastly, prove that you are worth the trust. When you were allowed to apply a credit card, the credit card company assumed that you could carry out the responsibility. So be credit wise. Consider the effect of this in your long run.