How Teens Should Manage a Student Credit Card
When it comes to using student credit cards, parents can only give advice to help their teenagers avoid the trap of bad debt. Ultimately, building good credit and staying away from bad debt will all depend on how the teenager makes use of his/her account.
Do you own a one? If yes, then you are entitled to certain privileges and conveniences that cardholders enjoy. Nevertheless, don’t forget that along with the perks, you have the responsibility to abide your issuer’s terms and conditions. Failing to comply would mean paying penalty fees or could inflict some serious damage to your personal history.
What are the things you should remember in using your credit line? Listed below are practical management tips that are not only meant for students but for all card owners:
Understand the terms of use. Credit companies impose varying terms and conditions. It is very important to be aware of the exact rules before submitting your application. Do you know how the interest rate is calculated? How about the exact fees imposed on specific transactions? Since this will be your first credit line, you need to make sure that you know your privileges as well as your limits.
Review your monthly bills. Make it a habit to check your monthly bills before sending in your payment. It is not uncommon for errors to occur and if you do not pay attention to your card statements, you could end up paying for purchases that you never made. If you notice any errors, call up your issuer right away to clarify the matter. As a card holder, you have the right to dispute inaccurate reporting as stated in the Fair Debt Collection Practices Act.
Skip the interest rate. Why pay for the extra interest rate fees when you can avoid them altogether? How? Simply by paying off your monthly balances in full. Even if your program comes with a 0% APR, remember that the zero interest may only be applicable within a limited period. Once the introductory period expires, you will incur the regular interest rate cost on your outstanding balances.
Keep your charges minimal. Whether your credit cards for students in college program offers a low rate or a high rate, it is strongly recommended to watch your credit limit usage. By keeping your monthly charges minimal, paying in full will be easier and extra fees such as interest rate, late fees and overdraft charges can be completely eliminated.
Choose a program that suits you. Consider your personal needs and lifestyle. Don’t compare yourself with other people, as each of us has his/her own financial capabilities. Don’t be tempted to get a reward credit card just because your friends or classmates have one. If you cannot commit to paying your monthly balance in full at all times, then a non-reward card with a low interest rate is the most practical choice.
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