College is a time when you make huge changes in your life. You may be living away from your parents for the first time. The classes you take can be very different from what they were in high school. And in many cases the campus is just huge.
It’s also a great time to learn more about handling your personal finances. If you were lucky, your parents worked with you on this already, and you have a pretty good idea how to live on a budget, balance your checkbook and maybe even handle a credit card well.
If not, it’s definitely time to learn, provided you have the self control to only use it when you need it, not when you want something extra. Control is vital to keeping your credit card debts down.
But even choosing the right credit card to get started is important. College is one of the easiest times to get your credit history started, but it is also one of the easiest times to mess it up for years to come.
On many campuses there will be tables with credit card representatives wanting to sign you up. They may have little gifts for those who do. There’s nothing wrong with signing up at one of these, so long as you really understand what you are getting into. You are better off knowing first what you want from your credit card.
For example, it should be easy to get a card without an annual fee, even if it offers rewards. Annual fees are rarely worth it in terms of whatever extra benefits the card may offer, especially when you are just starting out. I strongly recommend avoiding these.
The interest rate should be reasonable. You may be able to get a card with a 0% introductory APR, but the key is to remember that this is introductory. Make sure you understand where the interest rate ends up at when that term ends.
You will also want to understand when your payments will be due. Late payments will have a negative impact not only on your credit score, but potentially your interest rate as well. You want enough time that you can easily make your payments.
Rewards are nice, but they generally result in higher interest rates. They are best for those who intend to pay off their card each and every month. If that’s not you, you will most likely do best with a plain card. But if you can handle it, the rewards cards offer some great ways to get something extra back for the money you spend.
But your own attitude towards your credit card is most important. If you cannot handle the responsibility when your friends are suggesting you buy something that you really cannot afford, college may not be the best time to get a credit card. Wait a while, work on your spending habits, then get one when you are ready to use it appropriately. It will help you quite a bit in the long run.
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