Top Credit Lessons For College Students

An important topic that is often overlooked in college is credit; in particular how to build it, why one should build it and how to manage it responsibly. Most college students do not possess adequate money management skills and are often overburdened with large student loans and credit card debts. Learning to avoid these credit pitfalls and establishing a healthy credit history is an important skill that ought to be learned in college. The following are credit lessons for college students: Develop a healthy respect for credit cards This is an absolute must while you are in college as it will help you build your credit history which is crucial for purchasing a vehicle, renting an apartment, or could be helping you with landing your dream job after graduation. How can you responsibly manage your credit card? Keep your spending low: The best way to avoid big credit card debt is by keeping your expenditures under control. Use your credit card only when you are 100 percent sure that you will have the income to pay off the debt in full. The goal for having the credit card is not to build more debt, it is to use as a tool for building good credit. Pay your bills on time: Make sure you have your budget in place and that you know your due date. If you pay your bills late, over 30 days a negative mark can go on your credit report. This will remain there for 7 years. If it helps, create bill payment reminders on your mobile device. By paying your credit card bill on time, you will create an excellent credit history. Avoid the “use now, pay later” temptation: this is a common error made by many college students. Because credit card bills are due once a month and because they encourage you to pay a minimum balance, many students trap themselves by racking up a huge credit card bill which they are unable to pay off in a single payment. Now add to this mix rising cost of living expenses, when you’re just setting up your new place to live in your post-college “real life” and you will soon find yourself paying only a minimum balance each month. Healthy credit choices can put you on a strong foundation during and after you graduate.