Going to college can be quite an exciting experience. It is a time when there is a lot more independence, and part of that independence is a certain amount of financial freedom. However with financial freedom this can also mean that mistakes can be made. This can especially be the case with credit cards.
Credit cards are like a very sharp knife in the kitchen, they are very useful but can hurt a person a lot if they are poorly used. There are some things that a new college student, or someone who has been a college student for some time, can do to ensure that credit cards are used well during college.
The first is to look at the terms before signing up for credit cards. Students are often pre-approved for credit cards and they can find that they get a credit card with a pre-approved credit limit. This should be looked at carefully before being used as pre-approved credit cards tend to have higher interest rates, lower interest free grace periods and worse terms and conditions. The card is deemed to have been agreed to as soon as it is used in a transaction. This will mean that these can usually be improved by shopping around for a credit card through the internet.
Another common method that credit card companies use to market to college students are signing up bonuses. A signing up bonus is when something is given away free for the act of signing up to a credit card. These bonuses can include tee shirts, pizzas and coupons at clothes shops. These are usually given at booths in or near a college. Although there is a chance that these credit cards will have a competitive rate of interest and good terms and conditions, the chance is better if the student shops around. The signing up bonus is more likely to be significant if the student shops around.
Another thing that should be thought about carefully is the credit limit on a credit card. A student has a low income and can quite easily find themselves in more debt than they can pay back. It may be a good idea to limit the amount of credit that is sought.
It is also a good idea to monitor statements when they arrive. This can mean that spending is being watched as well as if the card is being used for unauthorised transactions, which if spotted early enough can be reversed out.
