As credit card is one of the common mods of payment these days, more and more students are adopting this cash-less payment method for college expenses and other associated costs. But, the most important thing students should know that credit cards are not free money that can be used to make payments, but it is a loan. They need to pay that money back to the card provider. That is the reason, it is important to use credit cards wisely and don’t spend more than they cannot accord to pay off.
Graduating with a huge credit card debt can put your finances at risk and a damper on your future plans especially if you have missed credit card payments or defaulted due to not making the payments.
Here we have listed some best credit card usage tips for students to get most of their cards without getting into debt.
Choose a Credit Card Wisely
Unless you are sure it is a good deal to avail, never sign the agreement with a credit card provider just for the sake of a mug of coffee. go through the terms and conditions of the agreement carefully and check all the important things including interest rate, usage limit, and rewards offered, etc. Whether the company is offering interest-free credit card, balance transfer features, or other cash rewards, make sure to compare them to the other offers, and then choose your card wisely. A good student credit card comes with no annual fee, low credit limit, and lower interest rate.
Apply for Only One Card
Since there are a lot of enticing offers available, it is always good to apply and keep one credit card. Signing up for every new card causes a significant drop in your credit score. Moreover, the more cards you hold, the higher risk of getting into huge credit card debt. That’s why experts always suggest students apply for only one card to meet their financial needs effectively without having an impact on overall credit history.
Only Swipe where you Can Afford to Pay
A credit card was the best option to charge things you cannot pay at the moment but will pay later. Using credit card everywhere is the quick way to build credit card debt you are unable to repay as a student. The minimum use of credit limit allows you to pay the debt off easily. Furthermore, swiping credit card everywhere can also end up paying more than the actual price.
Make Full Payment Every Month
Making full monthly payments before the due date is one of the best ways to prevent credit card debt and bad credit scores. So, try to make the payment right away when you get the bill. In this way, you just pay for the things you purchased, not for extra things and charges that credit card providers charge in case of late payments.
Don’t Take Cash Advances
Cash advances are not as useful as they see. They can add up credit card debt quickly as most of the credit card providers charge 2-4 % fee against cash advances. Always try to use the available credit limit and avoid cash advances to meet your financial needs without getting into debt.
Don’t Cross your Credit Limit
Crossing the allotted credit limit not only add up over the limit fee into the monthly payments, but they are also difficult to pay off. That is the reason, always try to stay under your credit limit and stop using your card when you reach 30 % of the credit limit as going above 30% can have an impact on your credit score.