Credit
card companies bombard students with card offers on many college
campuses. To persuade students to apply for a card, company
representatives may hand out T-shirts, key chains, coffee mugs, and
other products. You may want to have a card for emergencies and for
establishing a healthy credit history. Many U.S. banks do not issue
credit cards to non-U.S. citizens, however. Look into the regulations
surrounding credit cards before you arrive in the United States. Some
of the cards have high interest rates and limited credit lines. Credit
cards, when used properly, are an effective means for building a good
credit history. But when used carelessly and irresponsibly, credit
cards may do more harm than good—you may find yourself in debt and the
victim of a bad credit report for years following graduation. With credit cards so easy for college students to obtain, you may be wondering why companies view them as appealing card holders. The answer is loyalty. Credit card companies know that students tend to use their first card long after graduation. Evidence of the desire to gain college students' business can be found online. Visa, MasterCard, and American Express have information and online applications tailored for students.
If you have decided a credit card is necessary, set up some guidelines and ground rules. Credit cards don't provide free money. Monthly statements must be paid on time and in full, preferably. Determine the credit card's function: is it for emergencies only or for school supplies and books? Set a foundation for your credit card usage to avoid frivolous purchases. Also, figure out a budget. Put your monthly expenses on paper, and estimate how much you can afford to pay on a credit card. You may want to monitor your card activity the first semester of college to make sure you are using the card properly and aren't accumulating a large debt.
Read through the charges listed on your statement to ensure mistakes haven't occurred. Factor credit card payments into your monthly budget, and pay the bill on time to avoid late charges.
Shop Around
When it comes to applying for a credit card, students should be selective. To stay debt-free, Nellie Mae suggests you shop for a card that offers the following:
- low interest rates or finance charges
- low or no annual fees
- a grace period for posting finance charges
- other benefits such as warranties, free gas, airline miles
