Credit 101: Student Credit Cards (cont.)
Contributed by Caryn e Zent
Student Credit Cards: Use Them Well
Credit cards can be life savers for college students. But remember: the money is a loan! Yes, it is actual money. Decide in advance what you will use the card for and figure out how the payments will be made. Set up a budget and actually follow it; debt payment should make up no more than 10% of your net income. Start out with one card and limit its use. If you can, pay off the balance each month. If that is not possible, make more than the minimum payment.
A $1000 balance will take 12 years to pay off if only the minimum payment is made each month. Whatever you do, PAY ON TIME. A lapse of even one day is a negative mark on your credit report and can cause the bank or issuer to crank up those interest charges. If you find yourself spending unwisely and your credit is getting out of hand, take action immediately. Stop carrying the card. Seen the commercial where the woman freezes her card in a block of ice? If that's necessary, do it.
Ask your parents for assistance. Remember, the way you use this one card will affect your entire credit future.
