Student Credit Cards - Planning For The Future

Summary: This article outlines the benefits of student credit cards and also warns against some of the pitfalls of credit cards.

Student credit cards are looked at by most students as an easy way to spend more money. But using every student credit card that is thrown at you does not make much financial sense. Used properly a student credit card can prepare you for the future and enhance your money management and planning skills. The Benefits Of Smart Use Of Student Credit Cards Through proper use of your student credit card, you build good credit history. This is something that will stand by you in the future. A good credit report helps you in future employment, your first car purchase, home purchase, as well as insurance. An intangible benefit of student credit cards is that it helps organize your finances. By being able to see a report of your spending you might realize that your nightly pizza for the year could have bought you your first car. But hey a student credit card is not about giving up pizza! It is about learning more about where your cash is flowing, which is a very good financial preparation for the future. Each Card Is Different When you apply for a college student credit card, be aware that the first one you see is not the same as the rest. Student credit cards differ in many respects. Remember like many other things in life when you get your first student credit card, do not forget about the fine print involved. Building Good Credit History Remember that while building a good credit history, you must have an active account. At the same time making your payments on time is important to your credit history. Never go on shopping binges that are going to weigh down your credit card. Instead keep a good account of how and where your money is going. One way to keep the student credit card account active is to use it to pay your monthly bills. These could be telephone bills, utility bills or any other. Set a monthly expenditure target for yourself and use your college student credit card to monitor that target. You can then reward yourself by making that essential purchase that you always wanted to. Make Informed Decisions Most important is that you make an informed decision about the college student credit card you apply for. Each card has a different APR, annual charge and miscellaneous charges. But each card will also provide unique benefits. The APR is the rate at which interest is charged on overdue money. Your aim as a cardholder should be to always minimize finance charges as best as possible. However, in the event that interest is charged, you should have a card that charges you the least. Some student credit cards have a 0% APR initially and no annual fees. Generally rewards programs are toned down on college student credit cards. However some cards do offer exciting rewards, rebates and insurance plans that make student life a lot easier. But regardless of potential reward benefits, be sure to choose a student credit card that is tailored to your specific needs, whatever they might be Gaining Financial Wisdom Beginning financial planning early reaps rewards later in life. However it must be done with care. It is easy to get carried away by the pace of student life and overspend. Use your college student credit cards conservatively and use it primarily to pay off monthly bills and expenses that you know you can pay off, but you can also build a good credit history that will pay back later in life. If you should choose to get a student credit card, think of it as an enjoyable learning experience outside the classroom. If you can do this, you will derive the maximum benefit from student credit cards.