Credit Cards - Students

Rules and Tips for Students to Protect Their Credit Ratings and Card Privileges.

A student credit card is designed for high school and college students and usually works the same way as any credit card that has been issued by a financial institution. In general a student credit card merely has a few more restrictions relative to non-student cards.

1) Budgeting Beauty

Take time to establish a monthly budget for yourself, one that includes your credit card payments. Watch your bills and compare them with your budget each and every month. To avoid overextending yourself, keep your monthly debt obligation below 10 percent of your monthly net income (after taxes). For example, if your net income is $900 a month, your monthly loan payments should not be more than $90.

That includes your credit card payment because your card is a loan.

2) Adjust Your Spending

Make spending adjustments when necessary. Being prepared for unexpected and planned unexpected expenses is the best way to guarantee that your credit history remains clean and strong.

3) Credit Your Credit

How you handle your bank accounts and other responsibilities may affect your credit so the best way to establish a credit history is to use the credit already given to you. Use your credit responsibly. Be especially sensitive to the payment agreements you made when you established your accounts.

4) Limit Your Limit

The credit limit shown on your statement is the maximum amount that the institution that issued your card is prepared to lend you. Avoid spending to your limit. Set aside a portion of your available credit so you have it for emergencies. Charging over your limit is usually considered a violation of your agreement. You do not want to have to pay additional fees or penalties or force the cancellation or freezing of your account.

5) On Time Every Time

When a card statement arrives at your home, the most important item to notice is the payment due date. Your payment must reach the financial institution by the payment due date whether paying the minimum or paying the total. Otherwise it is considered a late payment and will probably appear on your credit history. Late payments can also be more expensive by incurring penalties, extra fees, or additional finance charges. If the account due date consistently falls at an inconvenient time of the month (a few days before payday, maybe) contact the lender to see if it can change your billing cycle.

6) Minimum Maximum

The minimum payment on your statement is just that: the minimum that the lending institution will accept for that certain month. Always be prepared to make at least the minimum payment. If you wish to reduce your finance charges, or plan to make a number of additional purchases in the coming month, consider paying a larger amount.

7) Stay In Touch

If you change your name or address notify your lender immediately. Send your updated information before the fact, not after. Your payment could turn into a late payment in the time it takes for a statement to be forwarded to your new address. Also, contact your lender if you cannot make a payment on your account for any reason. Special payment options or arrangements may be arranged that will keep both you and your lender happy.

Would you like to learn a whole lot more about the credit card industry? Do you need a credit card?

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