Plastic Money: The Other College Credit

College campuses across the country have become fertile ground for credit card companies looking to bring young adults into the fold and make lifelong customers out of them. While it may not seem at first like young college students would be the best credit risk, many of them have a parental support system in place to bail them out if they get in over their heads. For this reason, and the fact that students tend to spend a lot of money on food, rent, clothes and entertainment, credit card companies have learned to focus attention and promotion on hooking these young students. To pass all of these offers up isn't necessarily the best answer. After you're out of school and on to your first fledgling job, the credit card offers won't be nearly as enticing. You may have to settle for a less-than-optimal card if you want to break into the credit world (which you will). For this reason, a credit card in college is probably a good idea, but there are things you can do as a student to build a good history of credit and not ruin your rating before you're even in the real world.

First things first. For young people who have never had a credit card, getting the first one can seem akin to finding a pot of gold. Going into a department store, looking around, and knowing that you could feasibly purchase anything you see simply by slapping a piece of plastic down on the counter can be an intoxicating feeling. Deny it. It wouldn't be a bad idea to put a purchase or two on the card to break it in and begin establishing a payment history, but keep it within your means. Don't put anything on the card (save for dire emergencies) that you can't pay off at the end of the month.

As far as paying off your balance at the end of the month goes, there are two schools of thought. One set of credit experts advise keeping a small balance on the card to show lenders that you are capable of handling an outstanding loan and can keep up with the payments each month without falling behind. Another school says to pay the balance off at the end of the month to avoid accruing interest. Choose your own method, but what you definitely do not want to do is make only the minimum payment each month. This will lead to a serious accumulation of interest and before you know it, that dress you paid fifty dollars for has cost you over a hundred.

One of the main things creditors will look at when determining whether or not you are a good credit risk is if you have missed a payment or were late on a payment. Make sure you never do this. Make your payments early so you can be certain not to miss the due date. A few days over the line won't look bad on your credit report, but it will lead to exorbitant late fees and it can also lead to losing whatever attractive introductory rate you received when you signed up for the card.
The main thing to remember when breaking into the credit world is that responsibility is rewarded. Treat your credit card with respect and care, and avoid the temptation of seeing that little square of plastic as a ticket to free money. If you build your credit history well, and build it early, it will be that much easier to buy a house or a car in the future. Make your payments, make them on time, and keep your purchases reasonable. With these things in mind, your credit rating will take care of itself.