What can happen if you don’t use your student credit card wisely?

Student credit cards are specially designed to introduce college freshman into a new credit card world. These plastics often come with a reasonable interest rate and tempting rewards matching young people's interests. Properly used, student credit cards will give you a head start on building your credit. However, young spenders can also get into a serious trouble because they have never had any serious financial obligations before. 

Most college student can get a student credit card if they are over 18 years old and have some form of income. Typically, lenders set rather low credit limit, but if you make regularly timely payments and don’t overspend, the amount of available credit will be increased. Students who have no income may be required to have a co-signer to qualify for a credit card. In this case your co-signer will be responsible for payments.

Nearly all college students want to have at least one credit card because it will help them a lot during their college years. Student credit cards can be used for purchasing books or concert tickets, renting a car, emergency cash, and even gasoline for a trip home. 

Student credit card offers can be found in campuses, mail boxes, bookstores, etc. If you want submit an application online, explore Capital One, Discover or Citibank websites. Before submitting an application, it is necessary that you conduct a thorough market examination to get the most suitable deal.

Apart from financial help, student credit cards will assist you in building a solid credit score. Living on a cash-only basis is not a good choice because credit scoring system is based on what happens to your credit account: payment records, defaults, new credit inquiries, types of accounts you have, available borrowing limit and more. A good credit score will help you qualify for a car loan or mortgage, receive a good job offer and lend an apartment in future. 

Make sure that you are using your student credit card in the most appropriate and responsible manner. Poor money management is the Achilles’ heel of many students. They are getting into serious debt that has little to do with their higher education and much to do with their style of life and spending pattern. Do you want to pay for your new shirt for over five years?

There are main mistakes that you need to avoid if you don’t want to spend a big chunk of your income after you graduate to pay off items that you have bough with your student credit card:

Overspending. It is known that young people tend to behave like kids in a candy store and exceed their credit limits. Please remember that credit cards are not free money. Sooner or later the bill will come and you will have to pay it. If you can't eliminate your balance at the end of the billing cycle, you will end up paying even more in interest charges. So control your expenses and don't charge more than you can afford.

Late payments. If you want to avoid increasing borrowing costs, make regular timely payments. Otherwise, lenders can charge late payment fees or apply a default APR. Late or missed payments will also damage your credit score.

Not having a budget. Planning a budget can seem boring and tiresome routine. However, it is an excellent way to stay on track and avoid frivolous purchases. Consider using personal finance software to make budget planning easier. 

Multiple new accounts. Credit companies work hard to get college students to sign up while in college. Resist the temptation to apply for every plastic that captures your attention. You can easily overspend if you have several cards in your pocket. Plus, numerous recent credit inquiries will hurt your credit history.

Not checking your credit report. Monitoring your credit report is vitally important if you want to detect fraudulent charges promptly. Cleaning you identity may take plenty of time and money. So don’t forget to get a copy of your credit report from each of the three major credit bureaus on a regular basis.

After graduation, you will definitely have a whole new set of problems to resolve, like finding a job or renting an apartment. Don’t make the situation worse by accumulating a heavy credit card debt that you will pay off several years after you graduation!