subject: Students Need To Learn About Credit Cards [print this page] One of the most enjoyable parts of life is when children leave the nest and go to college! This is the start of a brand new life. However, this also marks the day that these Americans become responsible for themselves financially in most cases. With that said, charge cards are a very important part of consumer financial stability! Knowing this, many college students are on the hunt for the best student credit card. However, there are a few things that college students should keep in mind about charge card accounts:
FIRST AND FOREMOST, IF YOU ARE NOT READY FOR A CREDIT CARD DON'T GET ONE! I can't stress this enough. Credit cards are indeed an important key to consumer financial stability however, credit card account debt is also the leading reason for financial hardships in the United States! It is important that before people apply for a credit card, they can trust themselves with their own finances! I know this sounds like an insult but I did it to myself when I first started. When I got a $4,000.00 credit limit, I spent it all! I then spent the next 3 and a half years trying to pay it off and fix my credit! Again it is not worth having a charge card account if you feel you are not ready for such a responsibility!
If you feel as though you are ready for a charge card account, there are a few things that you should know when it comes to using charge card accounts properly! Remember, improper use of charge cards is the leading cause of financial hardships in the United States! With that said, take out your note pad and write these key points down! Don't forget them:
1. Always send my payment 2 weeks in advance.
This is important! Paying a credit card late can cause an increase in APRs and a decrease in credit scores! Sending a payment 2 weeks in advance allows the post office time to get your payment to the bank and the bank time to process the payment. To avoid late fees, high annual percentage rates and adverse affects on credit scores, consumers should always send credit card account payments 2 weeks in advance!
2. Never spend more than 50% of my credit limit.
When people get a charge card account, they are provided with a credit limit. This is the total amount of cash that consumers are allowed to borrow using their charge card. However, when the first sign that consumers show when facing a financial hardship is excessive charge card account spending leading to debt above 50% of their credit limits. This increases the risk to the banks and can have a negative affect on credit scores. With that said, to keep their accounts in good standing and their credit scores up, consumers should never spend more than 50% of their credit limit!
3. Pay more than my minimum payment.
A credit card account minimum payment is just that, it is the minimum amount of cash that the bank is willing to accept as a payment on debt. Consistently paying more than the minimum payment on credit cards shows financial strength. On the other hand, paying the minimum payment on charge card accounts is yet another sign consumers show of financial hardship increasing risk to banks. Therefore, consumers should always pay more than the minimum payment!
Now, what you should do is keep this list, when you get your charge card in the mail, tape it to your credit card so you don't forget! Remember, this is one of the keys to maintaining financial strength!
