From tuition fees and social activities to commuting and accommodation expenses, students have lots of things to juggle with. And without having enough financial guidance, they may develop bad spending habits in college that cause serious financial toll for years to come. Getting a student credit card could be a great way for students to manage study-related expenses effectively. When used responsibly, a credit card can help students start building a better financial future even when they are earning academic degrees. Since not all credit cards come with the same features and benefits, some are good for personal expense payments and some are useful for monthly payments like utility bills and more.
Here are some fundamental tips to consider for saving as a student while navigating your finances with a student credit card.
One Card is Enough
When you are eligible to apply for a credit card, there are several best credit cards offers presented to you. But you should get only one card to meet your financial needs in college life. Applying for multiple cards can affect your credit. This is the reason you should limit your usage to only one card to build good credit and avoid juggling multiple payments at the end of the month. To choose the right one, you should compare available offers and choose a student credit card that offers lots of opportunities to save money.
Swipe your Card for What you can Pay Back
Having a credit card doesn’t mean you can swipe it for anything. Whenever you use your card for payment or purchase, you need to pay the borrowed money back before the due date. This means you should only use your student credit card for things you can easily afford to pay back. For example, if you want to pay for your favorite book on Z library using your credit card, make sure to check whether you can pay back the amount to card issuer before due date or not. Before you make a transaction, rethink whether it is affordable to you or not. Otherwise, you will be paying added interest and late fees charges, etc. These additional costs can add up fast to build a huge wall of debt.
Make Monthly Payments on Time
Payment history has a direct impact on your credit score. This means you make it a priority to pay off your balance before the due date. When you pay on time without getting late, it makes up almost 35% of your final credit score. And a better score helps you secure other loans or lines of credit in near future. It is very much important to make credit card payments before the due date and avoid partial or minimum monthly payments.
Build Credit First, Earn Rewards Second
Credit cards are known for earning free rewards and cash backs, but earning those rewards should not be your priority. Try to build good credit first and then focus on saving money by using enticing perks and benefits of your reward whenever you swipe. One more important thing to consider is that don’t just use your card for earning free points and rewards but try to use it when there is a need to make a payment and then consider earning discounts and rewards on payments. You must get a student credit card that comes with tools like a spending tracker and mobile app to stay on top of your finances whenever you want.
Compare Student Credit Cards and Apply for the Best One
Sticking to a budget is not always easy for students. But a student credit card can help them manage personal finances and academic expenses effectively. However, a student must choose the right credit card based on his/her individual needs and requirements. Using the lower credit limit and paying off the balance in full every month are the best practices to avoid building debt.