What Students Should Know About Credit Cards
One of the great things about being in college is how easy it is to get a credit card. Companies are eager to sign college students up for credit, knowing that they are likely to use it and that they have a good chance at a long term customer who may earn a good income.
But for students it isn't always such a good deal. They aren't always prepared to use a credit card, and can end up destroying their budding credit score. It really pays for them to think before applying for that first credit card, never mind the second or third one.
And that's the first rule, of course. One is all that is necessary. Two should be plenty. Three and you have too many. It's just too easy to go overboard with so many credit cards.
The next rule is to remember that credit cards are not free money. They're expensive money. You borrow, and if you don't pay back promptly, you pay interest. This stuff can add up quickly. Learning to treat your credit card just as you do your cash is a lesson that every student needs to learn right away.
Now here come your friends. Here comes the pressure to use your credit for fun stuff you don't really need and can't afford. Guilt, accusations of being boring, whatever they think of when you say you don't want to use your credit card.
Treating your friends is nice, but don't do it too often. Don't let them take advantage of you. Friendship doesn't necessarily mean you have to keep things perfectly equal, but it does mean you don't take advantage or let your friends take advantage of you.
This also means don't let your friends borrow money against your credit. If they don't pay you back, you suffer for it, not them. It's your score at risk. Don't let them use your card, even with you right there signing for it.
And of course don't forget to make your payments on time each and every month. This is one of the most important things you can do. If you can pay off the balance, great. You're saving yourself a lot of money on interest. But if you sometimes have to carry a balance, just make sure you don't fall behind on payments and that you pay more than the minimum. It's the best way to keep out of financial trouble.