When it comes to credit card tips and tricks, there are a lot of things you need to know. College students can get burned, and burned bad, by a whole host of common mistakes that will tank their credit score quicker than they can learn what is a good credit score.
Here’s the lowdown on the good, the bad and the ugly of credit cards.
Credit card basics
Everybody needs credit, right? So college students getting a credit card to build credit is a good thing. Sure, but there are some key credit card tips and tricks, aka the basics, which you should know. For instance, what is a good credit score? And how do you get one? “Six credit card tips for college students” by Chloé Morrison published on nooga.com August 27, 2014, answers those questions. Morrison wrote, “The two most important factors that impact a credit score are whether you pay certain bills on time and whether you are using all your available credit.”
What are some other basic tips everyone should follow?
- Plan your charges—don’t just swipe at random.
- Just because you have a certain amount of credit, doesn’t mean you have to use it all.
- If you are using a credit card to borrow money, ask yourself why.
College is all about learning the things you need to know. And credit card tips and tricks definitely fall into that area. So what are some common mistakes you should avoid?
- Saying yes to all cards. The first thing Lindsay Konsko recommends in “Five Common Credit Card Mistakes That College Students Make – And How To Avoid Them” November 7, 2013, for nerdwallet.com, is not to get too many cards.
- Not tracking what you have spent. Those swipes add up quick, so be aware of how often, and where, you are using your credit cards.
- Forgetting or ignoring your bills. A sure fire way for college students to tank their credit scores? Not paying their credit card bills on time.
- Thinking you’ll pay it all off later. Sure, credit cards may mean you don’t HAVE to pay it all off now, but if you are planning on paying everything off when you land that dream job, you just might be in for a rude awakening. Charge only what you can pay off each month and avoid a nightmare.
- Avoiding all credit cards. Maybe you are thinking that credit cards just aren’t worth the hassle. But as Konsko wrote, “Fifteen percent of your credit score is determined by the length of your credit history, so it’s crucial to start building that history right away.”
Credit card benefits
Despite all the dire warnings when it comes to credit card tips and tricks, there are some advantages for college students when it comes to using credit cards to help establish themselves financially. One example? Finding out what is a good credit score, and how college students can achieve one. Jim Wang wrote for USAToday’s My Money blog July 23, 2012, “5 Smart Credit Moves for College Students,” that focused on the things you need to know to make a credit card work for you. For instance:
- Never exceed your credit limit.
- Never carry a balance from month to month.
- Never use cash advances.
- Never pay an annual fee for a credit card.
Wang wrote, “When you exceed your limit, carry a balance, or use a cash advance, you’re going to get hit with expensive fees.” Last, but certainly not least, regularly monitor your credit report. The Fair Credit Reporting Act gives everyone the right to view their credit reports every 12 months through the three credit bureaus: Experian, Equifax and TransUnion. If there are mistakes, let the credit bureaus know and work toward resolving them.
Have you been burned by a credit card? What are your credit card tips and tricks that all college students need to know? Let us know in the comments.