March 27, 2017

6 Credit card mistakes that can put college students in debt

Getting higher education is good as it improves your eligibility status in the job market. However, this in general is also the time when students end up incurring unnecessary expenses. It would never be good for your career to graduate with huge debt. This is going to make it hard for you to obtain new credit and even a new job after graduation. Mostly students make the mistake of celebrating their life, free from the direct interference of their parents, thereby falling deep in debt. So, if you are going to start your college life, it would be important for you to avoid making any such mistakes.

6 Credit card mistakes - photo copyright Rick Sherrell

6 Mistakes you need to avoid

The main idea behind opting for higher studies is improving your qualification so that you can make decent money in the future. However, when you are in debt, it starts taking a toll on your credit. That is, with too much credit card usage your credit rating lowers. Now, when you will be applying for a new job, the employer will run your credit report and the credit score. Your application can be rejected on the basis of a low credit score and a credit report which has numerous negative listings. Therefore, you would never want to destroy your chances of obtaining the right job. So, you will have to:

1. Avoid crossing the credit limit – You will have to avoid overspending with your credit cards as it results in unmanageable debts. This may later make it hard for you to manage even the everyday expenses. Furthermore, when you tend to cross the credit card limit, it lowers the credit score. You should always maintain the credit usage at less than 30% of the available limit.

2. Avoid lending the credit cards to your friends – This is one of the commonest mistakes which college students make. Friends are definitely close, but money can go on to destroy your finances and your friendship too, at the same time. So, avoid lending your credit cards and running up your debts.

3. Avoid missing credit card payments – It is not only important for you to avoid using credit cards, but you will also be required to avoid missing the credit card payments. When you start missing the payments, these add up to result in even higher and unmanageable debts.

4. Avoid using multiple credit cards – You need to avoid using too many credit cards as these result in unmanageable and high debt amounts. Now a days even if the person doesn’t have much credit or slightly bad credit, can apply for multiple credit cards. Sometime offers on different types of credit cards become irresistible for many students as a result unnecessary spending rises which drags them into a debt trap.

5. Avoid taking out a credit card solely in your name – You need to avoid taking out a credit card solely in your name, even if you are eligible for the same. Obtain one jointly with your parents. This way you will be able to remain under the vigilance of your parents and they can help you avoid running up credit card debt.

6. Don’t get waved by lucrative new credit card offers – It is mainly the college students that credit card companies target. They make such lucrative offers, that you may find it good enough. However, it would be better to avoid opting for the very first offer. Take your time and decide as to which would be better.

The above are the things or mistakes you will have to avoid in order to remain debt free while in college.

Barbara Delinsky is a writer who is passionate about personal finance. She is a recent graduate with Finance as her major subject. Through her articles she guides people to organize their personal finances and helps them to reduce their debt burden.

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COMMENTS:

  1. Good information!

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