Credit Card Advice for Students

As anyone who has been through college knows, those are the years that credit card companies take aim at you and fire. In other words, the college student is their target market. That's why people in that age bracket are inundated with offers in the mail every week.

Why? Because those companies know that many college students are ready and willing to do whatever it takes to get their hands on a credit card. Most have never had a credit card before, but they know they can come in handy. Some students want to be able to spend a little bit more than they make every month. After all, the college years are when you go into massive amounts of debt with student loans anyway, what's a little extra on a credit card?

The dangers of plastic are real, though. My advice to students considering a credit card: be careful and move slowly. Don't jump at the first offer that floats your way. Look at your options, and see if you really need a credit card. If you want to build up credit, try to get a department store or gas card that can only be used at those specific locations. That will help immensely in controlling your spending habits.

Also: if you do feel the need to get a card, don't settle for a bad deal. Get the best interest rate you possibly can, as that will make a big difference down the road when you start making purchases. And as much fun as it might sound to tell your friends that you have a $10,000 limit on your Mastercard, try to find one with a low limit - like around $500 or so. You don't want to rack up thousands of dollars on a single card that will take years and years to pay off.

When you do decide to get a credit card, remember that it is very important to make on time payments. Every time you miss a payment, even if it only late by a couple days, it negatively effects your credit score. Additionally, most credit card companies will raise your interest rate if you start missing payments. This can end up costing you a lot more in the long run. If you do find yourself in a situation where the interest rate on your card has skyrocketed, look into transferring your balance to a different card. Even if your credit is poor, most companies will at least offer a low introductory rate that will save you a lot of money in interest. Once that rate expires, usually after a 8-12 months, you can always switch to another card again if necessary.