According to a recent Sallie Mae survey report, most college students have an average combined credit card balance of $3000. This essentially means students are entering the real world after graduation with a huge debt and this can hamper their growth to a great extent.
Before filling out credit card applications, it is necessary to know why exactly good credit is so important. The moment students start using credit cards, their usage starts being compiled into the credit report. Credit scores are then graded based on the credit report.
Credit report or credit score is used to decide on granting approval for your applications by employers, lenders, insurance companies, landlords and even the utility service providers. Negative credit marks can result from too much debt on credit cards and this will in turn bring down your credit score and prevent you from getting a loan for any purpose.
Before filling in the student credit card applications, it is therefore very important to decide on ensuring a good credit history. This depends on how best you use your credit card during your student years.
Applying for the best credit card
Do not get carried away by tall claims and free gifts offered from credit card companies. Ensure that you choose the credit card you know is best for you. Before you fill in and submit student credit card applications, go through the terms of agreement with care. Check the interest rates and fees and compare them with other credit card offers before selecting the card that best suits your requirements.
Keep your credit cards to the minimum during your student days. In fact, just opt for one credit card rather than taking any credit card offered to you. Your credit score will drop with every student credit card application you make. You also expose yourself to a higher risk of unmanageable debt by taking too many cards.
After your student credit card application is processed and you receive the card, use it diligently. Charge only up to the amount you can afford to pay. It is highly tempting to charge the card especially when you do not have cash. This will only build a balance you will struggle to repay. If you continue paying only the minimum amount due, you will be charged a heavy finance charge that will only make your repayment tenure longer.
The best way to apply for and use a student credit card is to pay the balance in full every month. This will avoid any credit card debt and will ensure that you do not pay any extra charges.
Cash advances on credit cards lead you to more debt. On the amount you withdraw, you will pay along with the finance charges, a two to four percent advance fee.
Student credit card applications are convenient and useful to a certain extent. Before applying for your own credit card, learn all the essentials that will help you keep your spending under control and will teach you how to keep within your limits.