While college students need credit cards for various reasons, the most important reason is to built and reinforce a positive credit history. If handled in an improper manner, a credit card can have a negative impact and can lead to an overwhelming burden of debt.
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As a student, it is necessary to choose a credit card that is easy to manage. Furthermore, you should restrain yourself from overspending and always ensure your balances are settled in time. The best credit cards for students in the market offer minimal fees, yet come with student-friendly benefits that will also help you to build a positive credit history.
Useful Credit Card Tips For Students
Most of the cards that we review on this website are prepaid, so whilst they can be used wherever there is a Mastercard or VISA sign. You cannot get into debt with these cards.
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However, should you require a credit card which does allow you to run up debt, then here are some useful tips for you.
Credit card companies offer many products and each comes with unique features. As a student, you should choose a card that is easy to manage. This will help you to have fewer conditions to adhere to, and you will easily avoid expensive mistakes.
Once you get a credit card, you may get tempted to spend higher amounts than you would without one. Using the credit card sparingly helps to minimize the temptation. Even if the company offers to increase your limit, do not accept the offer unless you can settle the statement balance each month. Only use the card for emergencies, to pay for hotel charges, taxicabs and other services that are necessary.
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If the card is kept safely, you can avoid making losses through identity theft. Before making any payment online, you need to verify the security level of the website. Additionally, monitor your credit history through ordering the freely available annual credit report. In case of any unusual activity, you are advised to report the case immediately.
Limiting yourself to a single card helps you to develop the habit of receiving and paying your bills on time. Choose a general Visa or Master Card for a departure store card, since these cards are applicable anywhere. Once you prove a good track record of settling payments responsibly, you can now apply for an additional card.
Although this may not sound like the best ideas, it is advisable to close the account if you are certain you will not get enough money to pay the credit card balance. If you know you will not be responsible with the card, simply close the account to avoid ruining your credit score. A credit default will damage your credit score faster than closing the account can do.
Minimum payments are just a small percentage of what you owe and this can be tempting if you are running low on cash. It is vital to remember that any balance you carry over accrues interest and will definitely cost more in the long run.
Over-the-limit fees are costly and can prove daunting to eliminate. Due to the way billing cycles are organized, you might think you are settling your balance below the limit, but finance fees will take it back. The best decision is to maintain your charges within 10 to 30 percent of your credit limit.