Top 7 Ways to Use Student Credit Cards

Student credit cards can be a great way to start building credit history but it’s important to know how to use them best. Otherwise, you can risk hurting your credit score or winding up deep in debt. Establishing good credit card habits early can set you on a path towards financial success. Follow these seven tips to help get your student spending off to a great start.
7 tips for using credit cards as a college student
1. Do your card due diligence
Make sure to do your research before you sign up for a credit card. You’ll want to read through the agreement terms and pay special attention to the interest rates and fees.
Shop around for the best fit for your spending needs. Some of the best credit cards for college students have low interest rates and no annual fees. Cards with annual fees often require high levels of spending to negate the costs of top perks and rewards, so it’s usually best to avoid them as a student.
2. Pay on time
Payment history is the biggest factor that goes into your credit score. Make sure you always pay your credit card balance on time. Skipping or paying your statements late can cause your credit score to tank. You may want to consider setting your bills to autopay so that you’re always guaranteed to pay on time.
3. Pay in full
Paying your credit card bill in full can both boost your credit score and help you avoid paying money in interest. The longer you go without paying your bill completely, the more you’ll owe due to accrued interest. Remember, your credit card isn’t free money. You should only spend what you know you can pay back within your statement period.
4. Watch your credit utilization rate
Your credit utilization rate is a ratio of the amount of credit you have available compared to the amount of credit you’re currently using. Lenders prefer to see your rate below 30%. Anything higher than this amount can make you appear like a risky lender who might be prone to overspending. Keeping an eye on your rate and making sure that you’re spending below 30% of your credit limit can help raise your credit score.
5. Don’t apply for multiple cards
Owning multiple cards can make it hard to track your due dates and how much you’re spending. If you start missing payments and rack up a high credit utilization rate, your credit score will suffer. And if you start overspending and can’t pay your balances in full, you could land yourself in serious debt.
6. Don’t let friends borrow your card
It might be tempting to let your friends borrow your card, but it isn’t a good idea. If one of your friends starts to spend recklessly, you’ll be the one on the hook.
7. Don’t purchase what you can’t afford
You should spend as if your credit card is a debit card. Only purchase what you know your bank account can afford. That way you’ll avoid buying unnecessary discretionary items and overspending.
Source: iQuanti, Inc.