How to Avoid Credit Card Debt in College

You may be saving money by earning your education at a well accredited college, but that doesn’t mean that you know how to manage your money. If you want to build credit rather than put yourself deeper into debt while you’re in college, then you’re going to need to know a thing or two about how credit cards work. You are also going to need to keep a close eye on your finances. Here is how to avoid credit card debt in college.

Choose One Expense to Buy on Credit

It can be very difficult to make sure that you always have enough money in your checking account to pay your credit card bills. Plus, if you’re not careful, you can easily lose track of how much money you’ve spent on credit within the month. That’s why it’s always good to choose one expense, like groceries, gas, or coffee, to pay for with your credit card. That way you can keep your spending under control to a pretty good degree.

Never Spend Money that You Don’t Have

It’s never a good idea to use your credit card when you don’t have enough money in your checking account to pay your bills. The reason why you have a credit card is to build credit, not to put yourself so deep into debt that you don’t know how to climb out of that hole. Unfortunately, if you make a habit of spending money that you don’t have, that’s exactly what will happen. So make sure that you are only spending money on your credit card that you know you can pay back at the end of the month.

Don’t Spend More Than 20% of Your Limit

If your limit is $1,000, then you never want to spend more than $200 within the month. That may seem very extreme, but it’s actually quite reasonable. Not only do the credit card companies actually consider you maxed out once you’ve spent more than 50% of your credit limit, but your credit score improves the fastest when you only spend 10-20% of your available credit allowance. So make sure you know what 20% of your limit is and keep an eye on your account so that you don’t go over that number.

Always Pay Your Bills on Time and in Full

Every time you get a credit card bill in the mail, you will see what the full balance is and then you will be given the option to make a minimum payment. It can be very tempting to only make that minimum payment, but unfortunately, that’s how you destroy your credit score and get yourself much deeper in debt each month. Plus, you will eventually have to pay a lot more money in the interest that accrues. So make sure that you always pay the full balance on time at the end of each month.

Don’t Apply for Too Many Lines of Credit

If you apply for too many lines of credit within a short period of time, not only will your credit score suffer, but it will be harder and harder to get approved. The reason why is because the credit companies consider it suspicious when somebody applies for too many lines of credit from a variety of different places at the same time. So be sure that you always wait 6 months to a year between credit applications.

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