Student Credit Cards Pitfalls
A credit card is not free money. This must be the first lesson ingrained for a budding participant in the credit card world. The credit used on the card must eventually be paid with interest at a certain point in time. So how can one on a limited income use the credit card as a tool for success rather than the creation of a further burden? Here are some ways that one can accomplish this ideal.
1) Use the card for education related expenses
Education related expenses on a student card would have rebates and discounts earned. This is a standard provision in credit cards available in the market today. Expenses for books or study implements earn discounts and rebates are counted on the gross amounts purchased on the card. And since books are purchased usually at the start of the term, the rest of the term would be to earn money to pay the debt. Always remember that the credit card is for the furtherance of the knowledge while at school and not for rolling good times.
2) Limit expenses to 25% of the credit card
This is the tricky part. Keeping expenses at a ceiling of 25% of the card’s credit limit would be the ideal way to control the debt. Always bear in mind that you control the credit card and you should not be controlled by the credit card. So how can one do this? Always keep the credit card receipts after purchases made. Do keep tabs on the running balance of your credit. Then upon receipt of the monthly bill, compare the expenses and see what items were charged on the card. Discipline yourself if you go over this limit. This would be the step towards fiscal responsibility.
3) Pay the minimum amount
Upon receipt of the monthly bill, one needs to validate the charges made on the credit card with the receipts of the actual purchase. This is to check if there were charges made which were not actually made but billed to the card. Do remember one is encouraged to pay the amount of the bill, but there is a minimum required amount to be paid. Paying the minimum amount not only keeps your credit live, but it also makes your credit rating clean since this would affect your future credit risk determination. Thus, do not forget to pay the minimum amount so that one can keep the credit score immaculate and your credit card expenses within reasonable amounts.
Student credit cards are risky financial propositions. Having a limited income may lead to financial ruin if the credit card is maxed out. So it is important that the credit is used for educational related expenses. Also, one must be frugal enough to keep the credit within limits. And the best way to keep the credit is to pay the minimum amount every month. These are time tested tips by others who adhere to these simple rules. By following these simple tips, a student can survive credit card pitfalls.
See: college student credit card debt
Tags: college credit card, college student credit card debt, student credit car