Find in this article some tips to use your student credit card wisely and build a good credit record. Use your student credit card regularly, every week at least, to make some inexpensive planned purchases. After that, what is most important for students, pay off the entire balance monthly.
Most undergraduate college students wind up with two things when they finish school: a diploma and a small mountain of debt. The typical student graduates with a debt of $18,900 – which is 66 percent higher than five years ago, reports loan provider Nellie Mae. This is where they end up with a CvvShop and it all goes downhill.
While the bulk of this is because of student loans, a growing part of this debt stems from unrestrained credit card use, according to Ray Martin, a financial advisor with The Early Show.
Credit Rewards Introduction
Increasing competition for customers caused different credit organizations to issue cards with various offers for rewards programs, offering cashback and points that can be exchanged for goods and services such as air miles, hotel stays, or car rental. With all the obvious advantages reward credit cards may not always be the best option among the variety of credit cards. Read more…
College students are prime targets for credit card companies, which market their services on 1,200 college campuses daily, according to the National Consumer Council. They entice students with T-shirts, mugs, and other incentives in exchange for filling out their applications. Many students eagerly apply for credit and use it unwisely.
From the time they start college until they graduate, students double their credit card debt and triple the number of cards in their wallets, according to Nellie Mae. Here’s another scary thought: by the time college students reach their senior year, 31 percent carry a balance of $3,000 to $7,000. Understanding Credit Cards
Contrary to what many college students would like to believe, credit cards don’t give you “free” money. They simply change the way you pay. In fact, using a credit card is like getting a flexible, short-term loan. Whenever you purchase an item with your credit card, you basically borrow money from the credit card companies and repay it when the bill comes in later.
Some students confuse credit cards with debit cards. These cards look and feel just like credit cards – except they operate in a completely different way. But when you use a debit card to pay for purchases – by signing your name or using your personal identification number (PIN) – the money is transferred immediately from your bank account to the store’s account. You can also use a debit card to withdraw cash, make deposits, or transfer funds between accounts.
Lower APR Rate
Does everyone love a bargain? Sometimes it is true, but not always. However, nobody likes to find out that they are paying too much for their credit card in interest and fees. Who doesn`t want to get the lowest APR possible? It is good that you think your credit card`s rate is too high, but it is not enough to lower it. If you`re paying too much interest, you need to take action immediately. Read more… The Pros and Cons of Credit Card Use
Credit cards are extremely convenient and useful financial tools – if properly used. They allow you to purchase goods and services worldwide quickly and easily, in person, over the phone, or online. Plus, they add to your personal safety by letting you limit the amount of cash you carry. In addition, a credit card helps protect your assets. If your card is lost or stolen, you can simply report it to the credit card company. The company will then deactivate the card, so it can’t be abused by others and will issue you a new one. However, if you lose cash – it’s gone.
On the other hand, credit cards can be expensive and hard to control – especially for young students who may not fully realize the seriousness of paying the monthly bill. If they are late making payments, the credit card company adds a late fee, usually from $15 to $35, and interest charges onto the purchase amount. Therefore, it’s important for young adults to understand that using credit to extend income to pay for things you can’t afford will only increase your debt. Such constant credit card abuse leads to unmanageable debt and financial crisis.
Manage Credit Debt
Buy it now but pay later. It became the American way. Without any hesitation, we can say that a credit card is a very useful and powerful tool. However, with the rising amount of American people using credit cards or even cards, too much of a good thing can lead to big trouble. Read more… An Important Tool for Establishing Credit History
Using credit cards is an important way to establish your credit history – good or bad credit. Your credit history is important because it’s one of the main factors lenders consider when approving you for a loan. Most lenders use your credit history to quickly and often automatically judge if you’re a good investment. If you have a bad or nonexistent credit history, you’ll have a harder time qualifying for loans at lower interest rates – or at all.
Different factors in your credit report can impact your credit scores, including your repayment history, amount of credit allowed, the highest balance, and borrowing patterns. To build a good credit history, you need to use your credit responsibly by paying your bills on time.