Credit Cards and College: How Not to be a Bull in a China Shop

“You’ve Been Pre-qualified!”

“Our Best Rates Ever!”

“Important Finance Information Enclosed”

It seems like every time you open your mailbox there’s a letter from a credit card company hounding you to sign up. They promise low monthly interest rates, no annual fees, and bonus points for rewards in the form of merchandise or flights. These credit card companies are counting on your naïve, excited outlook on borrowing money. They know that college students have a lot of expenses, and that they may not see how creditability is like fine china. College students are not always delicate when it comes to spending money.

So how do you make sure you don’t become a bull in a china shop and make the best choice when it comes to getting a credit card? You can start by reading this article.

Tip #1: Stay Away From Booby-traps

The credit card company’s main goal is to convince you to sign up for their card. Some companies will offer freebies, use words like “easy credit,” or tell you that you can cancel at anytime. Avoid these traps by reading all the fine print and paying attention to the gimmicks. If it sounds too good to be true, it probably is.

Tip #2: Ask Yourself The Hard Questions

– Do I really need a credit card right now?

– What is my income? Is it steady? Can I really afford this credit card?

– What do I plan to use my credit card for?

– How much credit should I get and how much do I actually need?

Tip #3: Not All Cards Are Created Equal

Shop around, do your homework, and compare, compare, compare. You should look for the following things while researching which credit card to get:

– A card with low Annual Percentage Rate (APR). You want the interest rate you are going to pay to borrow money to be as low as possible.

– A card with a super low or no Annual Fee. Why should you get charged every year just for having a card?

– Make sure you know the cards Default Interest Rate. This is what the company will charge you if you get a penalty or making a late payment (which you will never do of course).

– Look out for Universal Default. Some companies are sneaky and will raise your interest rate even if you always pay all your other bills on time.

Some credit cards are flat out horrible. Make sure you research those as well so that you don’t accidently sign up for one. Read about it here.

Tip #4: Some Words To The Wise

–       Don’t just pay the minimum; try to pay off your balance in full.

–       Don’t go over your credit limit.

–       Don’t take out cash advances.

–       Don’t forget you can manage your card online.

The horror stories are real. You don’t want to end up like some of those people on Hoarders who are not only buried under mountains of “stuff,” but are also drowning in a sea of credit card debt. While having and using a credit card wisely is a common tool to build a good credit history, falling into a credit card trap can ruin your credit for a long time. In order to avoid this, do your research and pay attention to detail. In college, it can be difficult to think long term, however getting a house, an apartment, a car, and even higher loans all depend on your credit history. Creditably is like fine china, once cracked it is never quite well mended.

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