For many, college will be the first time they start using a credit card. I was in my sophomore year when I got mine and I have picked up some tips and tricks to help other first-time credit card users through this.

Select Your Card

The first thing you’ll need to do is select your card. There are several credit card companies with cards specifically for students. Discover, Bank of America and Capital One all have student cards. Student cards might have lower limits, higher cash back on certain purchases and even forgive the first missed payment. 

You should review the benefits of each card to decide which works best for you. If you go with Discover, know it might not be accepted everywhere. While Discover claims 99% of merchants take its cards, I have run into a few times where it’s not accepted. However, Visa and Mastercard are accepted almost everywhere.

Create a Budget and Stick to It 

The trick to being successful with a credit card is managing a budget. When I was determining my budget, I took my monthly income and made half of that number my budget. 

The trick to sticking to this budget is tracking your purchases. Many cards have an app that allows you to get a quick view of your spending. While this is good for quick updates, the app should not be how you track. 

Some people prefer to use a spreadsheet, while others may use softwares like Rocket Money or Quicken. Even using a notebook and pen will get the job done, provided you are diligent about it.

Whenever you buy something, ask for the receipt to get an exact amount of money spent, then enter that information into your budget tracker when you get home. I have found doing this the day of purchase is easiest.

Don’t Push Yourself to Your Limits

Whenever you get your card, you’ll likely see something about your “limit.” Your limit is how much money you can put on the card each month. For student cards, this number will likely be anywhere from $1,000 to $2,000. 

Your limit is not your budget. Unless you can somehow spend $1,000 to $2,000 each month and not wipe out your bank account, you should not be going anywhere near your limit. Hitting your limit is called maxing out your card and you should never do it, unless you are completely certain you can pay it back in a timely manner. 

In all other circumstances, your budget should be much, much lower than your limit. Again, your limit is not your budget. 

Pay Your Card Back– In Full

Your credit card is a bill and it must be paid. From what I’ve seen, people may only pay off the minimum amount on their statement or forget to pay it off.

If you are worried about forgetting, set yourself a reminder on the day after the card closes out to pay it off. Set multiple if needed.

When you get your statement, you may see something called the minimum payment. This amount is often very low and many college students will pay the credit card company that number instead of their total amount owed for the month. 

Do not pay that minimum amount, unless you can pay off your entire bill before the due date. Your biggest priority is to fully pay it off before the bill’s due, otherwise you will be flooded with high interest rates. 

Protect Yourself and Your Card

A credit card is a very powerful tool and you must do everything in your power to keep it from falling into the wrong hands. Your card can be compromised, which usually means your card has to be deactivated and you have to be sent a new one. 

However, there’s some easy things you can do to keep that from happening. The very first thing is to sign up for purchase alerts. Many credit card apps can let you know something was bought. If this was you, no big deal, but if not, you immediately know your card is compromised. I have purchase alerts turned on for this very reason.

This is also where keeping a diligent record of your spending comes in handy. Whenever you receive your statement, check it against your own records. If there’s something on there that doesn’t match up, investigate it, as something may have slipped through or ended up there by mistake.

Additionally, try not to save your card on any accounts, or if you do, only do so on reputable websites. I get it, it can be very convenient to have all the information right there, but in reality, this makes you much more susceptible to fraud. 

Finally, while this may seem obvious, don’t ever give out your credit card information. Don’t text any information on the card and don’t loan it to a friend. They might take a photo and have access to all your information. Don’t leave your card lying out either– keep it in your wallet whenever you’re not using it and keep your wallet on you. 

I know I just threw a lot at you, but all of this is very important to being successful with a credit card. Now go out there and make good buying decisions! 

Categories: Life