College life is all about learning responsibility. There’s no one around day in and day out to push you to go to class or even to nudge you in the right direction. This is called adulthood – it’s when you have to make all of your own decisions and reap whatever consequences they sow.
While you’re in college, you will learn a lot about people, yourself and how life works overall. Finances re and should be a big part of the learning process. Even if you have a full scholarship paying your way through education, it wouldn’t hurt to establish credit while in school. This will make it easier for you to get an apartment, vehicle and even jobs after graduation.
So what can you do to establish a credit history while still in college? Read on to find out.
Find a Card That’s Right for You
Not all credit cards are the same – some have higher credit limits, better terms and lower interest rates. There’s really no such thing as the perfect credit card, especially when you’re first starting out but there are good credit cards. You’re going to have to determine what matters most to you. For instance, if you are looking to pay off your balances each month, then you don’t need to worry about the interest rates so much. However, if you have a shaky income, you don’t want to be stuck paying off a balance with insanely high interest rates.
There are a number of credit cards designed specifically for students, like Discover It Chrome, Capital One Journey and BankAmericard Cash Rewards.
Only Apply for One Credit Card at a Time
Each time you apply for a line of credit, your credit report is checked. And each time it is checked, your credit score is reduced. Since you’re trying to get a credit card, you need your credit rating to be high. If you are applying for multiple cards at once, then each financial institution that sees your credit report will see an even lower credit score.
Always Pay Off Your Balances in Full
It’s best to pay off the balance on your credit cards each month. This will keep you in a healthy financial state and it will help you obtain good credit and give your credit score a boost. You should only use your credit cards to pay for expenses you have each month, and then use your cash to pay off the credit card balance.
Use Your Credit Cards
Simply having a credit card isn’t going to build good credit. You will need to use them on a regular basis, so sitting them in your drawer to collect dust is out of the question. It’s about establishing a payment history, but if you’re worried about debt accumulation, just use the card to make small purchases, then pay them off right away.
Go with a Secured Credit Card
If you’re having problems getting approved for a traditional credit card, consider getting a secured credit card with the bank you have checking account with. A good credit card uses your own money as the credit line, so the bank isn’t risking anything. After a while of using and paying off the balance, you will have sufficiently proved yourself as a trustworthy borrower and will be approved for a traditional credit card.