Choosing the Right Credit Card for Your Student Needs: Factors to Consider

Your Mom’s got one, everybody you see in every store has got one, and when you see them flash the plastic, you may think it’s the answer to one of life’s most irritating problems: lack of money. The truth is it’s not but having a credit card can help you when you’re in college. When looking at options, you may be thinking of how much they will let you have: what your limit will be, and many people’s natural inclination will be to get the highest amount they can.

Credit Limit

Plainly and simply, this is the wrong approach. What you borrow you must pay back, with interest. The more you use, the greater the interest, and the bigger the chunk that comes out of your next piece of income will be. This is how people get into trouble with cards. In the movies you’ll people saying their cards are maxed out, meaning they can’t spend any more, but you don’t see them struggling to make the repayments. In real life there are consequences, and the consequences of financial imprudence can include hardship and stress. Therefore, it is important with your first credit card to find out what the repayments will be if you spend a certain amount, then make sure you can handle it.

What do you want loads of cash for anyway? You’re a student; you’re not earning money yet, and until you start earning, you can’t start spending. Credit cards are there and can help in the short term with important things. If your laptop suddenly fails for whatever reason and you can’t work without it, then get your card out and rectify the problem. But don’t go for the biggest, most powerful unit you can possibly squeeze out of your credit limit. Get what you really need and hang on to your money.

Look at the Details and Decrypt the Jargon

Do you know what APR is? Do you know what the penalties will be if you don’t make your repayments on time? Just as importantly, do you realize how much you can save by paying the full amount off each month? Get informed, gain an understanding of interest and how paying it will affect you.

Shop Around

Don’t get the first one you see. There are plenty of websites that will do the comparisons for you, so you don’t have to look up every card you hear about individually. Look up a review on the best credit cards for students and get the details you need. Review sites probably understand it better as they deal in facts, not aspirations.

Manage Your Budget

The better you handle your finances, the less you will have to rely on credit, so be disciplined about this. Look for bargains in everything you do. Spend only what you need to. Try to keep your card in your pocket. Just because you have one doesn’t make you rich. That can come later. Buy your books, food, pay your rent, hang out with your friends, and have some fun. Fun doesn’t have to be expensive, so don’t be afraid to be the one who says no.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.