Credit cards: thinking about going plastic?
College students are placed in the sticky limbo of needing to build credit for the future, but not wanting to accrue any more debt in the present than they already have in student loans.
Credit cards are a great way to build a credit history. However, one should be wary when getting one, as there are many elements and unknowns that can negatively impact the card holder.
In an article titled “Tips for College Students on Credit Card Use,” USA Today pointed out that it may be challenging for college students to obtain a credit card before they are 21, but not to fret because it is possible.
One pointer many people do not know is that applying for credit cards has a negative effect on your credit score. So, as the article pointed out, you might want to carefully consider whether you need the American Eagle credit card for the next sale.
Another great tip was not to get spend crazy with your fresh plastic. You should never have more than 50 percent used of your card’s allowance. Your credit score reflects the “amount you owe on your card divided by the credit limit.”
In a nutshell, the more you spend and the less you pay off hinders your overall score.
There are plenty of credit cards offered through your bank specifically for students. They usually come equipped with lower interest rates while you’re a student, as well as some other perks depending on the card you get.
Building a good credit score is very important for the next stages in a college student’s adult life: from buying a car to renting an apartment, applying for your own undergrad or grad school loans or even getting a cellphone plan!
Always pay particular attention to the minute details when looking into the credit world. Read all the documents they send you because there could be a catch to those seemingly wonderful initial perks.
There are also plenty of resources online that can provide great tips and tricks for knowing which card will work for you and how to actually apply for them.
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