Oh, what a wonderful and terrifying time going off to college can be. Moving away from home and making it on your own is a huge step. You have taken all of the right classes to prepare you to succeed as a college student. But, you need the proper education outside the classroom in order to succeed. That includes knowing how to handle your student credit cards.
Keep Your Head On Straight!
One of the first things you will notice when you arrive on campus is that there are student credit card vendors everywhere. It makes sense, really. The credit card companies want to establish relationships while their client base is young. This relationship can lead to car loans and mortgages down the road, not to mention finance fees generated by the exuberant spending of American youth. Before you embark on this smorgasbord of credit consumption, you ought to consider a few things.
Consider, for instance, that the average student ends their college career with just under $3000 in credit card debt. An astounding ten percent of all students graduate with more than seven thousand dollars in credit card debt. I know, I know, you hear this statistic all of the time. It seems abstract and it is easy to tell yourself, “Well, I’m not the average student; I won’t fall into that trap.” That’s good. No, really, that is a great frame of mind. The (difficult) trick is to keep that perspective so you don’t get seduced by your newfound spending power.
Some Quick Tips
Here are a few quick tips to keep your finances in order:
- Keep your card count low – Have you ever seen John Q. Consumer with 39 credit cards in his wallet? Absurd. Since you are just starting to build your credit history you shouldn’t need more than a couple of cards. Choose wisely.
- Shop Around – Don’t grab the first credit card offer you see. There are a ton of options out there, and a little patience will get you settled into the card you need, and possibly save you much money and stress over the long run.
- Pay Your Balance!!! – It’s the cardinal rule for developing superior credit: keep your balance low, and pay it off completely when it’s appropriate. If you do this now, you will get far better credit card offers in the future.
- Tell Your Parents – Yeah, yeah… it’s the last thing any college student wants to hear. “Tell your parents.” Um, yeah… right. Well, in spite of your new independence you should let your parents know about your credit cards. They are a good resource for not just emergency financial support, but more importantly, for financial advice.
Finding the right student credit card can make all of the difference. Two of the most popular student credit cards are the Citi Platinum Select for College Students, and the Discover Student Clear Card. The Citi Platinum Select Card is an all around solid choice for first time card owners. It is an essentially bulletproof option for any student looking to establish credit history without having to worry about a minimum income, or a co-signor on the card. For those students looking for a little extra, they should start with the Discover Student Clear Card. The Clear Card has a lot of extra features, including up to 5% cash back on specific purchases. Both cards share a six month introductory APR of 0%.
When you arrive to college it is a good idea to get a student credit card or two, but it’s a better idea to use them wisely. You will quickly find that the right card is an extremely useful tool for your purchasing habits and developing a stable credit history. You shouldn’t be afraid of credit card ownership; rather you should realize that this is an early step to develop a happy financial picture in the long run.