Credit Card Advice for College Students

Student use of credit cards can lead to graduation with painfully high debts, increasing the already significant debt load many students carry with student loans. Credit card reforms introduced in 2010 make it more difficult for students to obtain credit cards, as either a co-signer is required or proof of income. Nevertheless the most prudent advice for college students considering credit cards is, if you need to use credit to make ends meet then you are living beyond your means, and credit cards should be avoided at all costs.

Using a credit card can help a student to establish a good credit reputation, a vital thing to acquire. Students should ask themselves how tempted they would be to overspend with the ease of a credit card, or if they can maintain financial discipline. Students that are confident that credit will not lead to excess spending, but can be controlled, should consider applying for a student credit card with a rewards program in order to establish a credit history. Cash backs and bonuses for paying on time are some of the offers available which reward those who use credit responsibly.

Students who feel the temptation of easy credit could get out of hand would be better advised to apply for a secure credit card in order to learn how to handle credit responsibly before advancing to unsecured credit. Secured credit cards represent the ideal way for novice card holders to learn how to handle credit sensibly, and the line of credit is secured by a deposit held with the issuing card provider.

Students should be aware of the ideal way to use credit cards. Paying off the balance in full each month to avoid any interest charges is highly recommended. Making credit card purchases which remain within 30 percent of the credit limit, and repaying the full balance, will help to establish a good credit history. Although there is no obligation to pay more than the minimum payment it is bad practice to do this. Interest charges soon add up and attract further interest, leading to debt. The last thing a student needs to deal with when struggling with paying for college expenses is unnecessary additional expenses.

It is never a good idea to use credit cards for cash advances. A convenient cash withdrawal from an ATM will result in hefty interest charges levied on the advance from the moment the machine releases the cash. Additionally there will be a fee of typically 3% levied for the convenience. It is far better for students to get into the habit of paying with cash, or using debit cards to obtain cash, than ever considering a credit card for a cash advance.

The consequences of paying a credit card bill late are costly. Not only will a late payment fee be applied to the account but a penalty interest rate may be incurred. Students should set up automated payments to deal with their credit card bill to ensure that the payment date is never overlooked. Paying late will not only have financial consequences but will be the first step to impaired credit. Search for student cards that offer bonuses for paying on time.

College offers a great chance for students to learn how to become financially astute. If in doubt about ones ability to manage finances prudently then credit cards are best avoided until a later time. However if they are used as a tool to establish credit whilst gathering rewards they can be a useful accruement that could lead to the enhanced benefits one acquires with excellent credit.