Many students have not been educated on how to mange money and handle credit cards.  When these students arrive on campus, not only do they have to learn how to navigate the campus, handle heavy course loads and make some friends along the way, they have to deal with money pressures as well.  Students are often bombarded with credit card offers from vendors tempting them with free giveaways if they apply for a credit card.  Being on their own and in many cases, away from Home for the first time with little money, it is very tempting to starting charging up their credit cards just to stay afloat.  This can lead to major debt problems upon graduation.

It is necessary as a college student to understand the importance of a credit history and how it can affect the quality of your life.  When you start using credit cards you are starting to build your credit history.  How you use these credit cards is reported to credit bureaus that put together a Credit Report on you. The most important factor that influences your Credit Report is your payment history – whether or not you pay your bills on time and whether or not you make at least the minimum payments due. Lenders use this information to determine whether or not you are a good candidate for a loan.  At some point, you may want to get a loan for a car, rent an apartment, or eventually purchase a Home.  If your credit history is not good, you may have a hard time finding a lender to take a chance on you.  If they do, they will probably charge you a very high interest rate on the loan.  Be responsible with your credit cards to avoid this headache.

Tips for Responsible Credit Card Use:   

• Limit yourself to one card and keep the credit limit low.  Choose a card with a low Annual Percentage Rate (APR).
• Before you purchase something with a credit card, set aside the cash ahead of time so you know you can pay it back.A
• lways pay your bills on time to avoid late fees.
• Always pay at least the minimum monthly payment but whenever possible pay as much above the minimum as you can.
• Keep track of your charges.  Review your credit card statements monthly and check for errors.

If you must use your credit card, try to keep your balance at 50% less than the available limit, and never exceed it!

In order for you to be able to pay your bills on time, you need to be able to manage your money.  Knowing the basics of banking is the first step:

• Open up a checking and savings account.  Choose one with discounted fees, or better, no fees at all.
• Learn to balance your checkbook effectively by keeping good records.  This means recording all transactions such as   ATM withdrawals, deposits, checks, transfers, debit purchases, etc., so you don’t overdraw on your account.
• Consider using the convenience of online banking to pay your bills.

Many students don’t realize how much they spend on non-essential items and often find it difficult to keep up with their bills.

Track your spending and create a budget:

• Add up your monthly expenses such as food, rent, car, laundry, etc.
• Figure out what your monthly income is.
• Subtract your monthly expenses from your monthly income to see how much you have left over for non-essentials.
• Record your spending for a few days.  Include everything – even a pack of gum or a can of soda.  By doing this you will see how much money is squandered on junk.
• Develop a spending plan and see where you could reduce or eliminate spending altogether.
• Now that you are spending less and saving more, put this leftover money into your savings account so it will earn interest.

Follow these basic steps and keep your financial situation in order.  Set yourself up for a stable financial life after graduation.

Many students have not been educated on how to mange money and handle credit cards.  When these students arrive on campus, not only do they have to learn how to navigate the campus, handle heavy course loads and make some friends along the way, they have to deal with money pressures as well.  Students are often bombarded with credit card offers from vendors tempting them with free giveaways if they apply for a credit card.  Being on their own and in many cases, away from Home for the first time with little money, it is very tempting to starting charging up their credit cards just to stay afloat.  This can lead to major debt problems upon graduation.

It is necessary as a college student to understand the importance of a credit history and how it can affect the quality of your life.  When you start using credit cards you are starting to build your credit history.  How you use these credit cards is reported to credit bureaus that put together a Credit Report on you. The most important factor that influences your Credit Report is your payment history – whether or not you pay your bills on time and whether or not you make at least the minimum payments due. Lenders use this information to determine whether or not you are a good candidate for a loan.  At some point, you may want to get a loan for a car, rent an apartment, or eventually purchase a Home.  If your credit history is not good, you may have a hard time finding a lender to take a chance on you.  If they do, they will probably charge you a very high interest rate on the loan.  Be responsible with your credit cards to avoid this headache.

Tips for Responsible Credit Card Use:      

    * Limit yourself to one card and keep the credit limit low.  Choose a card with a low Annual Percentage Rate (APR).
    * Before you purchase something with a credit card, set aside the cash ahead of time so you know you can pay it back.
    * Always pay your bills on time to avoid late fees.
    * Always pay at least the minimum monthly payment but whenever possible pay as much above the minimum as you can.
    * Keep track of your charges.  Review your credit card statements monthly and check for errors.

If you must use your credit card, try to keep your balance at 50% less than the available limit, and never exceed it!

In order for you to be able to pay your bills on time, you need to be able to manage your money.  Knowing the basics of banking is the first step:

    * Open up a checking and savings account.  Choose one with discounted fees, or better, no fees at all.
    * Learn to balance your checkbook effectively by keeping good records.  This means recording all transactions such as   ATM withdrawals, deposits, checks, transfers, debit purchases, etc., so you don’t overdraw on your account.
    * Consider using the convenience of online banking to pay your bills.

Many students don’t realize how much they spend on non-essential items and often find it difficult to keep up with their bills.

Track your spending and create a budget:

    * Add up your monthly expenses such as food, rent, car, laundry, etc.
    * Figure out what your monthly income is.
    * Subtract your monthly expenses from your monthly income to see how much you have left over for non-essentials.
    * Record your spending for a few days.  Include everything – even a pack of gum or a can of soda.  By doing this you will see how much money is squandered on junk.
    * Develop a spending plan and see where you could reduce or eliminate spending altogether.
    * Now that you are spending less and saving more, put this leftover money into your savings account so it will earn interest.

Follow these basic steps and keep your financial situation in order.  Set yourself up for a stable financial life after graduation.

<-- back to article index