The argument whether students should get a credit card or not continues and people on each side have valid reasons to justify their point of views. Indeed, we cannot deny the advantages of having a student credit card but ultimately, enjoying these advantages will ultimately depend on how the young cardholder manages his/her account.
In reality, not all young people are ready for the responsibilities involved in handling a credit card. However, for those who can exercise self-discipline and maturity, applying for a student credit card is still the best way to build a solid foundation of credit history.
So what does it take to properly manage a student credit card? Consider the following suggestions:
Pay in full. This is probably the most important aspect in managing credit card debt. Feel free to use it as you need to but make sure that you will be able to pay your entire balance for the month. Why must cardholders avoid carrying a balance in their accounts?
Although you choose to submit only the minimum due by your credit card issuer, such a habit puts you at a greater risk of bad credit. As you delay your payment, you continue to incur additional interest rate charges.
Bear in mind that credit cards usually impose an average of 14% to 19% APR on new purchases, balance transfers and cash advances. If you have to pay the extra interest rate fee each month, imagine how much money you’ll pay your credit card company just for extending your credit. Wouldn’t that be a waste?
Use it only for important things. Using your credit card while you’re out with your friends on a Friday night is obviously not a very smart thing to do. Why so?
First of all, there is a tendency you will not be able to limit your charges. You may even maximize or exceed your credit limit in that one night out. Second, you are supposed to be using your student credit card as a tool for building good credit, not on lavish spending. Third, you do have the means to pay for those charges on your own.
This is the perfect opportunity for you to show your parents that you are a responsible individual and that you are practicing your independence in mature way. Before using your student credit card for any purchase, carefully consider the circumstances.
Start with one credit card. While the new CREDIT CARD law prohibits issuers from conducting marketing campaigns and setting up application booths within 1,000 feet of college campuses, you may still receive offers through post mail or e-mail.
Since you do not have a full-time job yet, it is recommended that you start out with only one card to build your credit history. Even though you find attractive offers in the market, just say no and focus on managing the credit card you have.
Ann Wilson is the head writer of Reward Credit Card Site. This resource provides consumers with valuable reviews and information on the best credit card reward programs. Its main objective is to help people to take advantage of credit card rewards and start earning reward points. Copyright © 2008
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