It is during the recession period the flow of credit seems to tighten up and as a result people who are credit worthy but have no credit history especially, students have to face a great problem. If you’re a student, then you must have a credit history to get credit cards and loans. If you have a good FICO score or your parents have already included you on their credit card accounts, then it will be easier for you to build up a credit history. Fortunately, credit card companies have realized that students have credit needs and have created students credit cards with low limits, reasonable interest rates and looser credit requirements.
4 Tips to use your credit cards properly
Read on to know how smartly you can use your credit cards and avoid credit card debts.
- Select a suitable credit card:
When you’ll shop around for a credit card, it is important for you to review all the terms and conditions of the card before you opt for it. Try to take out a card with low rate of interest so that, the repayments of your bills become affordable for you.
- Stop frequent usage of credit cards:
You should try to use cash to purchase items. For example, if you use your credit card to pay $20 for a burger, it can become $200 if you stretch your payment period by making only minimum payments in your cards. Thus, you should rarely use your credit card to avoid credit card debts.
- Know your credit card limits:
It’s very important for you to know your credit limits so that, you can avoid paying penalty for exceeding the limit. This will help you analyze how much you can spend based on your income.
- Maintain your credit limit:
It is advisable that you should not spend more than 25% of your available credit card limit. This will help you avoid having outstanding balance in your cards. It’s because as a student with limited income you’re ill-equipped to handle your excessive unpaid bills. If it goes out of your control, you’ll dig yourself into a deeper hole.
Lastly, if you find yourself having trouble making payments on your cards on time and can’t spend within your means, you should stop using your credit cards and focus on repaying your credit card debts. It will be good idea to secure your financial future because people who use credit cards, need to have good credit habits to maintain an excellent credit record otherwise, they may fall into huge debts.More information !