Using a Student Credit Card
If you’re one of the millions of students planning to attend college next year or if you’re already enrolled, you have likely received more than a few student credit card offers in the mail. At this point in your life, you probably haven’t done much to start building your credit score. These offers represent some of the best ways to get started. However, student credit cards can also be dangerous to your credit score if you’re not careful. With your credit history being so short and your score very malleable, it won’t take many mistakes for a student credit card to cause damage. Read up on these tips to help build your credit and avoid the common pitfalls associated with student credit cards.
Tips for Building and Maintaining Your Credit
- The easiest way to damage your score with a student credit card, or any credit card for that matter, is failing to pay your bill on time each month. Late payments are simply a killer to your credit score, not to mention your wallet. Mail in your payments at least 10 days early or set up an online account that automatically withdraws the payment for you every month.
- Just because you have credit does not mean you have to use it. In fact, you should do your best to avoid using your student credit card unless it’s absolutely necessary. Carrying a high balance on your credit card will result in high interest rate charges, and can hurt your credit score. Your debt to available credit ratio is an important factor in determining your credit score.
- Limit yourself to just one or two student credit cards. The more credit cards you have, the more likely you are to pile up debt. Also, creditors often consider applying for multiple credit cards as a sign of financial instability.
- If you’re still deciding on which student credit card is right for you, make sure you take the time to examine every card’s specific terms. Some may have low interest rates for now, but increase after 12 months. Others may charge an annual fee or require that you spend a certain amount on the card to receive benefits.
- Students make easy targets for identity thieves, so always report a lost or stolen credit card immediately. As long as you report the card missing as early as possible, you won’t be responsible for any charges made on the account. Failing to do so could wreak havoc with your credit score for years to come.
- Does your student credit card carry an enormously high interest rate? Avoid putting too much debt on it and earnestly pay your bill on time each month. After you’ve shown yourself to be a responsible borrower, call up your credit card company and ask them to lower your rate. Surprisingly, many companies are more than willing to lower rates in order to keep customers around.
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