Top Credit Card Advice For College Students

For students going to college for the first time, you will probably receive tons of college student credit card offers. Take the time to learn the responsibilities of building credit. Making larger purchases later in life such as a home will be easier with good credit. There are some important things to know, and following these tips will help educate you on how credit works and how to use it wisely.

MAINTAIN A GOOD CREDIT SCORE
Having a credit card with a large balance and making minimum payments might seem like a good way to establish credit, but your FICO score will actually reflect you as a credit risk. If you max out your credit card and can’t pay it off you become a liability. Your interest rates on other purchases, such as a vehicle, may be affected by this.
It is best to keep as much open credit as you can on your card. Use your card for purchases that you can pay off quickly. When you are just beginning to build a credit history its best to keep a “zero” balance each month. This will not only affect your credit score for the better, but will also help you avoid paying interest.

• INTEREST RATES: This is something that you must pay careful attention to. If you realize you are unable to pay your balance, or use your card for an emergency such as a car repair, you don’t want to discover too late that the interest eats up your payments. Some cards offer 0% for an introductory period, while others offer a low rate. Find the best college credit card with low interest and long term offer so you won’t have any surprises later.
• DEBIT CARDS: Debit cards will offer the same conveniences of a standard credit card. With these, the money is automatically deducted from your checking account. The only drawbacks to a debit card is the fact that is does not help with establishing your credit score. If your card is stolen, the thief will have immediate access to your funds. While there may be no liability, it can be a huge inconvenience while the report is investigated.
• REWARD CARDS: If you know that you are responsible about paying your bills every month, perhaps you should consider a reward card. By using a reward card for monthly expenses and paying it off each month, you can increase your rewards for things such as flight miles - great if you have to go home to visit - or cash back offers. Find the reward that meets your needs best.

ASK YOUR CREDIT CARD COMPANY TO NEGOTIATE
There’s fierce competition between credit card companies. Once you complete your student credit card application and get approved, contact your credit card company and ask them to lower the rate. If you make on-time payments they will likely negotiate with you. Good communications equals good terms with your credit card company - they make money from you, so make them work hard to keep you as a customer.

Whichever card you go with, make sure to be responsible. Educate yourself on the risks of having too much credit, keep your spending under control, and use the credit card to your advantage.

Never rely on your credit card as a source of income. Use the card wisely. It’s best to keep your balance available for emergencies. Don’t use it for going out on the town, since that money isn’t free. Learning good spending habits during college makes the learning process more complete. Financial responsibility may be the most important thing you learn during the college years.